Australia’s auction clearance rates continue to battle a six-year low. Despite an improvement, the latest results show fewer than half of properties selling under the hammer are sold.
Ray White has revealed a preliminary clearance rate of 42.6 per cent on Saturday, up from 35.5 per cent last week.
Sydney’s clearance rate came in at 48.5 per cent, while Melbourne recorded a stronger result of 67.4 per cent.
The agency reports that Brisbane is continuing to face a challenging market, coming in at 27.7 per cent.
Ray White NSW Head of Performance Callum Hogan said Saturday’s auction results show a market that continues to be divided.
“We’re seeing a real two-speed market at the moment. Properties that are positioned well, with sellers who understand current market conditions, are still achieving strong results,” Hogan said.
“Those holding onto ambitious price expectations are getting a very different response, and in some cases, no bidding at all.”
The results come after Australia’s clearance rate plunged last week to its lowest level in more than six years.
The combined capital city clearance rate crashed to just 40.7 per cent last week according to data from Cotality.
The result marked a staggering drop from the 65.8 per cent recorded at the same time last year, with auction clearance rates still well below the levels they were a year ago in every capital city.
The collapsing results come as buyers are facing mounting pressure from higher borrowing costs, with the Reserve Bank lifting the cash rate for the fifth time this year to 4.85 per cent, its highest level since 2008.
For homeowners with an average mortgage of around $742,000, Cotality estimates repayments are now a crushing $600 a month more than they were at the beginning of the year.
Despite Ray White’s preliminary results showing an improvement, the outlook is grim, with economists warning Australia’s housing downturn is set to become the largest on record.
Commonwealth Bank has revised its forecasts, predicting national property values could fall around 14 per cent from peak to trough, compared with its earlier estimate of nine per cent.
Sydney prices are predicted to fall as much as 16 per cent, while Brisbane and Perth could face even steeper declines of 18 per cent.
Sydney’s median house price would drop from a high of $1.31 million in February this year to $1.1 million some time next year, wiping $200,000 in value.
The bank does expect the market to stabilise in the second half of 2027, but they are not expecting a significant recovery by then.
While Australian house prices are tumbling, it isn’t necessarily great news for those hoping the downturn means it is more affordable to buy.
New research by Domain reveals that mortgage repayments in Sydney, Melbourne and Canberra are now higher than they were during the recent house price peaks.
Across the combined capitals, house prices are 6.2 per cent below their peak, reducing the required deposit by $16,289, but there’s a catch.
Rising interest rates have diminished borrowing power, meaning nationwide, estimated monthly mortgage repayments have fallen by just 0.2 per cent, or $10 a month.
Higher borrowing costs have also absorbed most of the benefit of lower prices.
Domain chief residential economist Dr Nicola Powell explains that increased borrowing costs have swallowed up most of the benefit of lower prices.
“Normally when prices fall, buying becomes materially more affordable; this downturn is different because house prices and borrowing costs are moving in opposite directions,” Dr Powell told Domain .
“Deposits have become easier to save, but mortgage serviceability hasn’t improved and, in some cities, has actually worsened.”
Cotality has warned that higher interest rates, weak buyer confidence and ongoing cost-of-living pressures will keep property market conditions subdued well into next year.
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