Clearance rates hit six-year low as more than half of Australian homes up for auction fail to sell | Housing
Clearance rates in Australia’s capital cities have fallen to their lowest level in six years; Less than half of the houses find buyers at auctions.
Front Data from Cotality It shows that 47.4% of the homes that went up for auction in the week ending Sunday, June 21, were sold. This figure is a weighted average covering different rates in different capitals, but the figures are remarkable in every respect.
In Sydney, the liquidation rate was 47.4%, with 166 houses withdrawn from auction. In Melbourne, 50.6% of homes were sold under the hammer. In Brisbane, only 33.3% of homes found buyers. Auction rates were 40% in Perth and Adelaide and 47.1% in Canberra.
Clearance rates this low were last seen in April 2020, at the beginning of the Covid outbreak.
Cotality economist Annabelle Mezieres said the real estate company expects auction rates to fall further in the future.
“Auction volumes look set to decline further in the coming weeks, partly a seasonal trend but also likely in response to weak selling conditions,” he wrote in a statement, noting that about 24% of scheduled auctions had been pushed back and nearly half, or 48%, had sold before being hit.
The statements come less than a week after the Federal Reserve kept interest rates steady at 4.35%; This decision, as expected, will leave many mortgage holders facing much higher repayments than at the beginning of this year. The RBA has already agreed to three consecutive rate hikes and central bank governor Michele Bullock said last week that another rate hike was on the table because prices were still rising too quickly.
Housing will be in the focus of parliament this week as legislators move to debate the government’s capital gains tax cut and negative gearing regulation, as proposed in May’s federal budget.
Liberal deputy leader Jane Hume criticized the Labor government’s plans to roll back negative gearing and cap capital gains tax relief on Monday morning, describing them as “completely unfair”. He accused government MPs of moving up the ladder behind them after “many politicians” used negative methods to increase their own wealth.
Social Services Minister Tanya Plibersek said the government expected house prices to rise more slowly, not fall, and that the changes were purely to help first home buyers.
But Greens Senator David Shoebridge said the auction results showed the market was “disrupted”.
“Yes, no one is selling but no one is buying because no matter what Labor does with their messaging, the changes they make do not fix the fundamental dynamics of people not being able to buy a home in this country,” he said.
