Winter Chill Freezes Auction Markets
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Winter Chill Freezes Auction Markets

The national clearance rate is being propped up by the smaller capital cities.

By Terry Christodoulou
Mon, Jun 6, 2022 10:13amGrey Clock 2 min

Capital city auction clearance rates were generally, and sharply, lower than the previous weekend with the winter selling season arriving early this year in the major markets of Melbourne and Sydney.

The national auction market lifted to 69.4% from the previous weekend’s 67.3% thanks to strong performances in Brisbane (80.9%) and Adelaide (79.7%). The national figure is still well below the clearance rate reported for the same weekend last year of 80.7%.

National auction numbers also tumbled from last weekend, with 2220 homes listed compared to 2707 — well below the same weekend last year’s 2697.

Sydney’s market fell sharply at the weekend to reach a two-year low recording a clearance rate of just 60.3% at the weekend — well below the 66.9% recorded last weekend and the 80.7% recorded over the same weekend last year.

A total of 801 Sydney homes were listed for auction at the weekend — well below the 1013 of the previous weekend and lower than the same week last year’s efforts of 1048.

Sydney recorded a median price of $1,550,000 for houses sold at auction at the weekend which was well below the $1,720,000 recorded last weekend and 3.4% lower than the same weekend last year’s $1,605,000.

Melbourne saw similar results, with clearance rates sharply lower, equalling the year-to-date low of 63.8% seen on the election day weekend. The figure is lower than the previous weekend’s 68.1% and well below the 72.2% recorded over the same weekend last year.

Only 1095 homes were listed at the weekend in the Victorian capital — lower than the 1320 reported over the previous weekend and the 1369 listed over the same weekend last year.d

Melbourne recorded a median price of $1,117,000 for houses sold at auction at the weekend which was lower than the $1,150,000 reported last weekend but still 6.8% higher than the $1,046,000 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson, My Housing Market.

 

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House values continued to fall last month, but the pace of decline has slowed, CoreLogic reports.

In signs that the RBA’s aggressive approach to monetary policy is making an impact, CoreLogic’s Home Value Index reveals national dwelling values fell -1.0 percent in November, marking the smallest monthly decline since June.

The drop represents a -7.0 percent decline – or about $53,400 –  since the peak value recorded in April 2022. Research director at CoreLogic, Tim Lawless, said the Sydney and Melbourne markets are leading the way, with the capital cities experiencing the most significant falls. But it’s not all bad news for homeowners.

“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 percent,” he said. “That has now reduced by a full percentage point to a decline of -1.3 percent in November.  In July, Melbourne home values were down -1.5 percent over the month, with the monthly decline almost halving last month to -0.8%.”

The rate of decline has also slowed in the smaller capitals, he said.  

“Potentially we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls,” Mr Lawless said. “However, it’s fair to say housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.” 

The RBA has raised the cash rate from 0.10 in April  to 2.85 in November. The board is due to meet again next week, with most experts still predicting a further increase in the cash rate of 25 basis points despite the fall in house values.

Mr Lawless said if interest rates continue to increase, there is potential for declines to ‘reaccelerate’.

“Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire,” Mr Lawless said.

Statistics released by the Australian Bureau of Statistics this week also reveal a slowdown in the rate of inflation last month, as higher mortgage repayments and cost of living pressures bite into household budgets.

However, ABS data reveals ongoing labour shortages and high levels of construction continues to fuel higher prices for new housing, although the rate of price growth eased in September and October. 

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