The downtrend in our property markets continues as buyer and seller confidence wanes.
Sydney property prices dropped -0.6% from last week, dropped -1.5% over the past 28 days, and up 6.5% over the last 12 months.
Melbourne property prices dropped -0.4% from last week, dropped -1.0% over the past 28 days and up 3.5% over the last 12 months.
Brisbane property prices dropped -0.2% from last week, increased 0.2% over the past 28 days and up 26.1% over the last year.
Overall Australian capital dwelling prices decreased -0.8% over the last 28 days and 8.8% higher year on year.
What a week it’s been in property!
The media remains full of negative messages and consumers are getting concerned about rising interest rates and the talk of the possibility of a recession.
Of course, that's exactly what the Reserve Bank wants – it's wants us to stop spending and stash our cash so as not to inflame inflation.
Even though inflation is running at 5.1 per cent, and is tipped to hit 7 per cent by the end of the year, Reserve Bank governor Philip Lowe Dr Lowe has said he wants to see wage increases that “start with a three” and that “if wage increases become common in the 4 and 5 per cent range … then it’s going to be harder to return inflation to 2½ per cent”.
As unions push for more wage rises after the Fair Work Commission’s minimum wage hike this month, Dr Lowe warned of the potential for a wage-price spiral taking hold, which would necessitate a slower economy and rising unemployment to bring it back under control.
He also warned that Australians should be prepared for more interest rate increases, and there was no “preset path” for rates and the RBA board would be “watching household spending carefully”
However, Dr Lowe pledged not to repeat the costly mistakes of the 1970s stagflationary period, saying he was “committed to do what is necessary” to squash inflation before it became entrenched in the national psyche.
“A lesson from the 1970s is that if an inflation shock shifts people’s expectations about the ongoing rate of inflation, it becomes harder to reverse,” he said.
Over the weekend auction markets continue to hold the line, but listing numbers continue to weaken with the usually distracted winter market impacted by fragile sellers’ confidence in the face of recently sharply rising interest rates.
Here's what's happening to property prices...
- Sydney property prices dropped -0.3% from last week, dropped -1.6% over the past 28 days, and up 5.5% over the last 12 months.
- Melbourne property prices dropped -0.2% from last week, dropped -1.2% over the past 28 days and up 2.9% over the last 12 months.
- Brisbane property prices remained flat from last week, dropping -0.1% over the past 28 days and up 25.4% over the last year.
Overall Australian capital dwelling prices decreased -1.0% over the last 28 days and 8.2% higher year on year.
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 27th June 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.
Median property prices
- Also read:Sydney and Melbourne suburbs more likely to hold their value
- Also read:Latest property price forecasts for 2022 revealed. What’s ahead in our housing markets in the next year or two?
- Also read:RBA tells workers to take a “real” pay cut to help the economy | Property Insiders [Video]
- Also read:12 inflation jargons explained: Here’s everything you need to know
- Also read:Where should I buy my next investment property in Australia?
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
Auction clearance rates held their own this weekend being much the same as last week, but there were significantly fewer properties for sale by auction than normal in part because of the school holidays.
But with the media being full of negative messages again this week buyers remain cautious and vendors are also losing confidence fast, with auctions being cancelled or withdrawn from sale.
At the same time, 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.
However, it is 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 64.2% this weekend, which was a little lower than last weekend’s 65.4% and significantly lower than the 79.8% recorded on the same weekend last year
Dr Andrew Wilson reported the following auction preliminary clearance rates for Saturday 2nd July:
- Adelaide auction clearance rate - 75.9%
- Brisbane auction clearance rate- 64.9%
- Canberra auction clearance rate- 52.3%
- Melbourne auction clearance rate - 64.2%
- Sydney auction clearance rate- 63.7%
Source of graphs and data: Dr Andrew Wilson's My Housing market, CoreLogic, REA
READ MORE: This weekend’s auction clearance results