Auction clearance rates have hit levels not seen since the start of the COVID-19 pandemic, falling below 50 per cent over the past week.
The weighted average for auction clearance rates across Australia was 47 per cent.
It was the first time since April 2020 that they had dropped under 50 per cent.
And once the data is finalised, the numbers could be even lower, according to Tim Lawless, research director with information services company Cotality.
“Probably seeing the final clearance rate around the low-to-mid 40 per cent range, which again we haven’t seen since the initial lockdowns of the global pandemic,”
Mr Lawless said.
The cost of living, particularly in Sydney, is a major NSW election issue (ABC/Unsplash: Daniel Chen )
Last week in Sydney, 166 auctions were withdrawn — the largest number out of the capital cities, according to Cotality’s data.
Only 225 out of 645 total auctions were cleared.
There were a lot of factors driving the low clearance rates, Mr Lawless said.
“We have seen a recent acceleration in the downwards trend, but we were seeing clearance rates coming down in line with higher interest rates with a crisis in confidence amid the Iran war and higher inflation,” he said.
“I think it’s fair to say that, post-budget, we’ve probably seen a further blow to confidence that is seeing clearance rates fall even further.“
The RBA kept rates unchanged at its June meeting. (ABC News: Eric Hao Zheng)
Last week, the Reserve Bank kept interest rates on hold at 4.35 per cent, after three rate increases earlier this year.
The decision came after recent data showed that Australia’s economy had lost momentum and that unemployment had risen.
There is a “lack of vendor confidence” in testing the market, according to Mr Lawless.
“I think absolutely, we should expect there’s going to be a further loss of momentum in the pace of growth in housing values,” Mr Lawless said.
He said people looking to sell their homes needed to be “quite realistic” about what the market would be willing to pay.
“For buyers, they’re back in the driver’s seat in many ways; they’ve got more stock to choose from,”
he said.
“There’s clearly less urgency in the market, and they can negotiate harder, so it is very much a buyer’s market now in most markets.”
Sydney and Melbourne housing values have been falling since late last year, with mid-size capitals also losing momentum, Mr Lawless said.
“The last four weeks, Adelaide home values are only up 0.3 per cent — that’s the lowest we’ve seen in more than a year,” he said.
“Brisbane’s up half a per cent in four weeks.
“Perth’s now up 0.9 per cent, which is still a really strong rate of growth, but it’s less than a third of what it was at the end of last year.”
A minimum 30 per cent tax on capital gains will be introduced from July 2027, while negative gearing on residential property will be restricted to new builds.
