We’re back with our housing market crystal ball, deciphering Corelogic’s latest prophecies.
The past week has been a strange one for the Australian property market, to say the least. Capitals have maintained their clearance rates relatively quickly and steadily, curiously spared by recent flooding on the east coast.
However, the market appears to have collapsed overall. The number of homes and successful sales is down almost everywhere, especially compared to last year’s staggering numbers.
With property prices expected to remain high through 2023, experts predict an imminent cooling of the booming market. Do these figures confirm their cold forecasts? Let’s dive into it.
In all capitals combined this week there were 2,090 homes for sale – a significant drop from last week’s staggering 2,979 and last year’s 2,218 in the same week. This drop came mainly from Melbourne, whose market more than halved thanks to the Labor Day long weekend.
Of all the houses put up for auction, 72% have sold successfully so far, although the final figures could be revised down by Sunday.
This follows a relatively cold week where only 69% of properties were sold, compared to the previous five consecutive weeks which had all seen a strong performance of 70% or more.
melbournetypically a real estate hotbed, has hosted just 606 auctions this week, 72% of which have sold so far (compared to 78% last year).
during this time at sydney1,028 homes were auctioned with a preliminary success rate of 70% – significantly down from 84% last year.
The torrential rains apparently did little to deter buyers, as the rate of withdrawals from auctions reached just a modest 16% in Brisbane and Sydney last week.
Through small capssales rates continued their largely sinuous plateau.
|Preliminary sale rate||88%||68%||78%||100%||0%|
Previous downturns in the housing market have been attributed to oversupply and buyer hesitation. However, this week has shown us something particularly worrying: slow or steady sell rates on lower volumes. What does this lazy but decreasing trend mean for long-term housing affordability?
The housing market is showing worrying signs of fatigue. Taking stock of 2022 real estate trends, many experts are predicting a downturn over the next year – or at the very least, a recession.
Lower or stable selling rates, as we’ve seen this week, will likely drive house prices down over time, with Commonwealth Bank predicting an 8% decline by 2023. This could hit Sydney and Melbourne the hardest, as last year’s housing mania gave sellers attractive but unsustainable selling prices.
While this can also be great news for first-time home buyers hoping to break into a more affordable market, rising fixed rates and volatile variables make home lending big business. (And the widening gender property gap doesn’t help either).
All in all: the uncertainty surrounding housing affordability and the rising cost of living does not inspire buyer confidence at one end of the spectrum. Those who can invest in real estate may excel, but everyone else gets bogged down initially.
For more information on real estate trends, check out our 2022 home loan statistics. If you’re in the market, you can compare the home loans on offer or browse below.
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