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Highlights
- The property listings across major cities in Australia have risen considerably.
- Clearance rates have not moved in tandem with the rising number of properties listed for auctions.
- Housing prices do not seem to budge from their sky-high levels as sellers do not want to miss out on the gains from sky-high prices.
It appears Australian property prices have finally begun to simmer down from their record high levels after a growing number of properties are being listed for sale across the country. Data on listings suggest a supply-side frenzy wherein sellers are trying to put their properties up for sale amid speculations of a nearing interest rate hike. However, has demand shown a corresponding increase with these rising properties for sale? Let’s find out.
Property consultant CoreLogic estimates that Sydney is expected to see 1439 auctions in the week ending 21 November, marking a 78.8 per cent increase over last year’s listing in the city. At the same time, Melbourne is likely to witness 1651 auctions, while Brisbane and Adelaide are expected to see 250 and 260 auctions, respectively. Tasmania, the Australian state with the strongest economy, would only be seeing one auction in the coming days.
As a result of soaring listings, experts predict a price cooldown might be on the way. Additionally, as lockdowns and restrictions come to an end, sellers might gradually pull the brakes on the sky-high prices. Meanwhile, buyers could obtain a window to lock in properties at a relatively cheaper rate, with a wider variety being offered to them across different cities.
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Clearance rates tell a different story
In a surprising turn of events, clearance rates have not corresponded with the rising number of the listed properties. CoreLogic estimates a clearance rate of 75.5 per cent across the capital cities, marking a downward trend for the fifth consecutive week.
In Sydney, 75.1 per cent of the houses on sale had a final deal with customers. Also, a massive proportion (13 per cent) of the total properties was pulled out of sale, marking the highest withdrawal rate since mid-August.
A similar pattern can be seen across Adelaide and Canberra, where clearance rates dipped below 80 per cent for the first time in ten and nine weeks, respectively. Could this be a sign of depleting demand or just a byproduct of a rising number of properties being listed for sale?
A further surge in auctions on the horizon?
It is unlikely that a drop in housing demand would be on the way as demand-side pressure persists in the country. However, the fresh supply of listings has considerably stirred the pot for Australian housing. An additional rise in auction volumes can be expected in the months ahead as housing supply could further surge amid the removed restrictions.
However, despite the supply-side improvement, prices do not seem to rapidly budge from their sky-high levels. The affordability concerns continue to affect the Australian housing market, showing little to no improvement from an average property buyer’s perspective.
All in all, rising listings may not be the end to Australia’s housing price worries as sellers are not expected to leave an opportunity to cash in on the soaring prices. However, it would be interesting to see if a potential interest rate hike in the next year could change the game for the property sector.
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