Winter Fails To Cool Hot Auction Market
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Winter Fails To Cool Hot Auction Market

Records continue to tumble across the Australian capitals.

By Terry Christodoulou
Mon, Jun 21, 2021 10:32amGrey Clock < 1 min

This past Saturday, saw a June record 2888 homes reported for auction across state capitals.

As expected, this figure was well ahead of the previous holiday weekend’s 1413, and nearly three times the 1019 listed over the same weekend last year. It was the second-highest number of listings for the year, only surpassed by the 3118 recorded over the pre-Easter Saturday of April 27.

Despite the record numbers, the market continues its firm ascent with a national clearance rate of 82.3% achieved nationally. Saturday’s national result was also the highest recorded for six weeks.

Sydney’s recorded clearance rate of 80.8% was up on the previous weekend’s 77.8% and well ahead of the 67.9% recorded over the same weekend in 2020.

The NSW capital reported 1036 auctions on Saturday, just below the June record of 1048 set two weeks ago.

Further, the median price for houses sold at auction at the weekend in Sydney was $1,610,000, higher than the $1,555,000 reported over the previous Saturday and 19,9% higher than the same weekend last year.

In Melbourne, 1566 auctions were reported which smashed the June record 1379 set just two weekends ago – and was well above the 480 reported over the same weekend last year.

Melbourne recorded a clearance rate of 84.4%  — a dramatic rise compared to the 69.0% reported the previous weekend. The median price of $979,000 for houses sold at auction proved 10% higher than the same weekend last year.

Data powered by Dr. Andrew Wilson of 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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