Australian auction clearance rate falls as unsold housing stock rises
Australia’s preliminary capital-city auction clearance rate fell to 48.2%, its lowest level in about three months, while unsold housing stock rose 21.6% over the year to 276,000 properties. Analysts attributed the weak market to higher interest rates, long weekends and subdued buyer demand.
Australia’s preliminary auction clearance rate has fallen to 48.2%, its lowest level in about three months, as the spring property market opened weakly and the number of unsold homes increased sharply. Property research firm Cotality recorded 1,223 capital-city auctions in the latest week, 12.8% fewer than the previous week and 47.5% below the same period a year earlier. Fewer than half of the properties that went to auction were sold.
Cotality research director Tim Lawless attributed the result partly to long weekends in several states and the Reserve Bank’s decision to raise interest rates for a fourth time this year. He also cited changes in the federal budget that restricted negative gearing and increased capital gains tax for some sellers. Sydney and Melbourne weighed on the national result.
Sydney held 304 auctions, down 61% from the preceding week and 38.5% from a year earlier. Melbourne held 670, a large increase from the previous week, when an Australian Football League grand-final long weekend affected activity, but 45.6% fewer than a year earlier. Separate data from SQM Research showed that 276,000 homes were unsold across Australia, a 21.6% annual increase.
Properties that had remained on the market for more than 180 days rose 10.5% from a year earlier. SQM research director Louis Christopher said the increase was concentrated in homes listed for between one and six months. He said Sydney had fewer new vendors than a year earlier but almost a fifth more total stock, describing that as a demand problem rather than a sudden increase in supply.
Available housing stock rose 43.5% in Brisbane, 39.5% in Adelaide, 30.3% in Melbourne, 21.3% in Perth and 17.8% in Canberra, according to SQM. Distressed sales reached 4,872 in September, up 29% year on year. Lawless said households were deeply pessimistic about living costs, interest-rate increases and property-tax changes.
Economists cited by ABC News Australia have warned that prices could fall further.
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