Turns out, the auction market could keep it up.
All eyes were on the auction market this week, after the first weekend of the year posted the best start of the year results since Corelogic began collecting data:
“The first major week of auctions this year has been an absolute cracker,” CoreLogic’s Tim Lawless said.
The data house’s head of research said the auction markets were starting the year on a strong footing, with “news of low inflation and the possibility of early rate cuts already boosting sentiment.”
The question became about follow through. Was the first weekend an aberration – just a bunch of pent up demand over Christmas, or is the market as tight as the data suggest?
The answer? Crushing it. 76.2%. Even with a high number of properties going under the hammer.
Australia’s auction market boomed over the weekend, despite high volumes of listings.
The national preliminary auction clearance rate rose to 76.2%, up from 73.9% the prior weekend. This is the highest preliminary clearance rate since the first week of June last year, according to CoreLogic.
Melbourne hosted the most auctions, with 618 homes put up under the hammer. It recorded a preliminary clearance rate of 73.1%, which was the highest result since mid-July last year.
Sydney was not far behind, with 618 auctions and a preliminary clearance rate of 80.4%, the highest result since the week ending October 24, 2021.
Tim Lawless notes that this has been quite the turnaround:
“The newfound strength in auction markets is a radical turnaround from the December results last year, where the preliminary capital city clearance rate fell to the mid 60% range while final clearance rates dropped to the mid 50% level”, noted CoreLogic Research Director, Tim Lawless.
“The early part of the year can show some seasonality, however, with both the volume of auctions and the clearance rate coming in high over the past two weeks, it looks like the year has started with a much better fit between buyer and seller pricing expectations”.
However, while these results have been greeted with champagne toasts by real estate agents, there’s a fly in the ointment.
There just aren’t enough properties to sell.
In CoreLogic’s ‘Decoding 2024: Real estate’s trends and goals revealed’ – a survey of over 1,400 real estate agents, the lack of stock on the market was the biggest challenge facing agencies.
A full 41%said that low housing stock was the most significant stressor on their agency for the year ahead:
They’re not wrong. There has been a complete collapse in For Sale listings over the past few years…
… and zero recovery. For Sale listings remain about two-thirds of what they were back in 2012 – when the housing market and the population were much, much smaller.
And this is part of what explains the resilience of house prices in the face of the most aggressive rate hike cycle in history.
And its why prices are going to keep lifting through this year and next.
Just not enough houses mate.
JG.