Episode 25

The number of homes being put up for auction across Australia has plummeted as falling property prices and fewer cashed-up buyers shake the confidence of owners looking for the right time to sell

The decline of auction rates and confidence in the market

  1. CoreLogic – properties taken to auction last weekend was 1,909 – down from the previous year – 2,270.
  2. The number of homes being taken to market is down on average by 20 percent.
  3. Sydney, the preliminary clearance rate was 59.1 percent, indicating a classic “buyer’s market”. Property values plummeted by 5.6 percent to record over the past 12 months to a median house price of $863,769.
  4. Melbourne, the preliminary clearance rate was just 58.6 percent. House values have fallen 1.6 percent over the last 12 months to record a median house price of $709,568

Capital city median home values:

City: Annual change in price: Median value: Annual housing return**:
Sydney – 5.4 percent $863,769 – 2.5 percent
Melbourne – 0.5 percent $709,568 + 2.4 percent
Brisbane + 1.2 percent $494,634 + 4.8 percent
Adelaide + 0.7 percent $438,163 + 4.9 percent
Perth – 2.3 percent $457,274 + 1.6 percent
Hobart + 11.5 percent $435,833 + 17.1 percent
Darwin – 6.2 percent $439,596 – 0.8 percent
Canberra + 2.4 percent $590,229 + 7.0 percent
National – 1.6 percent $554,263 + 1.9 percent

*CoreLogic July Home Value Index, includes both apartments and houses

The Analysis
Coming down from the top – Last year was at the peak of the market

  1. Long term normal averages
  2. Why is this happening?
    • Consumer confidence
    • Prices are too high

 

Property Clock Link: https://www.htw.com.au/month-in-review/

Things move in Cycles
Residential property market goes in cycles

  • Supply and demand
  • Supply – Properties being built
  • Demand – Interest rates, credit availability, population increases
    • Demand may be dropping as auction set prices are too high
    • People may just not want to pay what people are asking for in the price
    • Especially Sydney and Melbourne

 

Don’t panic

  • Be aware, but don’t be alarmed
  • News stories are crafted just to sell
  • A few weeks is not a trend – Takes some time and may have just been a rainy day

 

Won’t see a massive drop

  • Investment properties will go first
  • Expensive to own property

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