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This week’s Australian Property Market Update – Latest Data, State by State July 25th, 2022

Homebuyers and property investors are getting nervous.

They face the prospect of interest rates rising faster than expected, at a time of increasing inflation which is putting even more pressure on the Reserve Bank

Currently the RBA cash rate of 1.35% is still stimulating the economy at a time of high inflation and a tight job market and it’s going to be a difficult task for the RBA to find the “neutral” interest rate – you know not too low to fuel inflation and the economy and not too high to force us into recession.

But while overall our economy is performing soundly, consumer sentiment – both fear and greed – tends to drive the property markets, and at the moment both buyer and seller confidence is fragile in the face of all the negative media.

So many discretionary buyers and sellers are just sitting on the sidelines.

On the other hand strategic investors and home buyers with a long-term view are taking advantage of this window of opportunity which will close when purchasers realise interest rates are nearing their peak and inflation is coming under control

The typically chilly mid-winter home auction market produced relatively steady results in most capitals over the weekend.

1487 properties were listed for auction, much the same as last weekend’s 1442 - and, not surprisingly,  this was well below the 1757 auctions held on the  same weekend last year.

This week marks the seventh consecutive weeks where the combined capital city preliminary clearance rate has been below the 60% mark.

Here's what's happening to property prices...

  • Sydney property prices dropped -0.6% from last week, dropped -1.9% over the past 28 days, and up 2.5% over the last 12 months.
  • Melbourne property prices dropped -0.3% from last week, dropped -1.2%  over the past 28 days and up 1.1% over the last 12 months.
  • Brisbane property prices dropped -0.3% from last week, dropped -0.6% over the past 28 days and up 23.1% over the last year.

Overall Australian capital dwelling prices decreased -1.2% over the last 28 days and 5.9% higher year on year.

 

Of course, these are "overall" figures - there is not one Sydney or Melbourne or Brisbane property market. And various segments of each market are performing differently.

To help keep you up-to-date with all that's happening in property, here is my updated weekly analysis of data and charts as of 18th July 2022 provided by CoreLogic, and realestate.com.au.

The number of A-grade properties for sale in Australia is still in short supply

While there are more properties on the market for sale, there is still a shortage of A-Grade properties and these are selling quickly

Despite there being more houses on the market for sale at present, remember that buyers are sellers and sellers are buyers so in most cases each time a property is sold another buyer is out in the market looking for a new home.

The table below shows the tables are turning in favour of buyers with more properties coming onto the market giving them more choice, hence the lack of urgency.

Vendor Metrics

At a national level, properties are taking slightly longer to sell than they were during the property boom of last year.

However we're still in a seller's market with the number of days to sell the property very low (a sign of the tight supply situation for good properties), and vendor discounting still at very low levels.

In general, houses are selling better than apartments, but the shortage of good properties on the market is seeing A-grade properties selling quickly with minimal discounting.

Our Rental Markets

Our rental markets have been tightening further with vacancy rates for both houses and apartments extremely low across the country.

Weekend's auction clearance rates

The typically chilly mid-winter home auction market produced relatively steady results in most capitals.

1487 properties were listed for auction, much the same as last weekend’s 1442 - and, not surprisingly, this was well below the 1757 auctions held on the same weekend last year.

With the media full of negative messages and the specter of rising interest rates, buyers remain cautious and vendors are also losing confidence fast, with auctions being cancelled or withdrawn from sale.

Similarly, many auction results are not being reported by the selling agents - which is a sign of a weakening market.

Currently, we're finding more homes are being sold before auction as sellers rush to make a deal rather than risk not getting a sale as vendors are becoming less willing to test the marketplace under true auction conditions.

Other properties are being passed in at auction, but selling straight after on negotiation with the vendor post-auction. The auction clearance rate doesn't always reflect this.

And it's likely that we'll see further falls in the auction clearance rates moving forward reflecting weaker buyer confidence, poor affordability and rising mortgage rates.

Dr Andrew Wilson of My Housing Market reported a national auction market clearance rate of 60.1% at the weekend which was slightly lower than the 60.8% reported last weekend but significantly lower than the 77.3% recorded over the same weekend last year.

Saturday’s result was the again lowest national weekend clearance rate since lockdown-impacted August 2020.

Dr Andrew Wilson reported the following auction preliminary clearance rates for Saturday 16th July:

  • Adelaide auction clearance rate - 74.2%
  • Brisbane auction clearance rate - 51.8%
  • Canberra auction clearance rate - 56.1%
  • Melbourne auction clearance rate - 60.7%
  • Sydney auction clearance rate- 57.9%