- 13 May, 2021

Property Market Conditions Remain Strong While Auction Clearance Rates Slow

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Australia’s property prices are continuing to stabilise even though auction clearance rates have continued to slowly trend downward, according to the latest national figures from CoreLogic.

For the week ending on May 9, 3,033 homes went under the hammer across the capital cities, making it the second-largest inventory week for the year.

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The preliminary clearance rate of 78.6% shows a drop of more than 2% compared to last week’s initial result of 80.4 %, which was amended to a final clearance rate of 77.7 %.

Canberra continued its streak as the city with the highest clearance rate, with 85.5 % of properties finding new owners. Sydney followed with 82.6%, while Adelaide and Melbourne were close behind with 77% and 76.5%.

Brisbane and Perth rounded out the week results with 72.0 %.

Corelogic’s data has also shown that houses are still the most likely to sell at auction than units.

80.9 % of houses available at auction were sold, while only 71.1 % of units were classified as being sold.

Melbourne led the week with 1,420 homes being listed for auction, which was an increase of 110 compared to the previous week. Sydney was also up with 1,157 properties available, up from 1,119.

While these numbers are trending downwards, Australia’s overall residential property market is still around record-breaking numbers with a combined value of over $8.1 trillion dollars.

CoreLogic’s home value index revealed that Sydney, Melbourne, Brisbane, and Perth house prices increased on a four-week rolling basis to April 18th. Sydney was up 2.3 per, Melbourne 1.5 %, Brisbane by 1.8 %, and Perth by 0.9 %.

Comparing auction figures with last year’s results, it’s significantly clear that even with record prices, going to auction has become a more popular and successful way to sell.

This time last year, only 480 auctions took place around the country, with a clearance rate of 59.9 %.

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These low supply and clearance rates have been directly attributed to COVID-19 restrictions that prevented prospective buyers from attending them.

Corelogic research director Tim Lawless believes that substantial short-term growth in the property market may start to ease and buyer demand increase.

“With housing prices rising faster than incomes, it’s likely price-sensitive sectors of the market, such as first-home buyers and lower-income households, are finding it harder to save for a deposit and transactional costs,” he said.

“If we are starting to see [buyer] demand impacted by affordability constraints, at a time when supply levels are rising, it makes sense that we could start seeing a rebalancing between buyers and sellers.”

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In order to combat the rising inaccessibility for first home buyers and low-income Australians, the new schemes announced in the Federal Government’s latest Budget may help.

Treasurer Josh Frydenberg said during his budget speech that while initiatives like the HomeBuilder scheme had been a success so far, “in this budget, our housing measures go even further.”

Announced in the Budget was an increase in the First Home Super Saver Scheme maximum contributions, from $30,000 to $50,000, an extra 10,000 places in the 2021-22 New Home Guarantee scheme, and the introduction of the Family Home Guarantee.

The New Home Guarantee scheme assists first home owners build or purchase a new home with a deposit as low as 5 %, while 10,000 Family Home Guarantee places are available for single parents that can buy a new or existing home with as little as a 2% deposit

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Words by Rimas Veselis

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