“Many homeowners would be motivated to sell if they had seen strong capital growth in their property, and they also know that the market is likely to continue to slow as the year progresses.
“We are likely to see some rebalancing between buyers and sellers. It’s great news for buyers, they’re finally getting some of the fading of this FOMO that’s been going on for so long and maybe more opportunity to reflect and negotiate their purchases.”
Buyer interest wanes ahead of rate hike
In Melbourne, the busiest market last week, 64 percent of homes have been auctioned, with 144 listed for the block, according to preliminary figures from CoreLogic in an indication that eviction rates are normalizing. The rate is roughly in line with December’s handling rates.
In Sydney, 79 homes were auctioned last week, with a preliminary eviction rate of 58.3 percent, slightly below the December average of 60.4 percent.
As the hot markets of Sydney, and to a lesser extent Melbourne, ease, it’s the smaller capital cities where the action is taking place, fueled by affordability tailwinds and shifting demographics.
Adelaide had the highest preliminary auction eviction rate at 78 per cent and 84 bids, followed by Canberra at 76.2 per cent and 27 bids and Brisbane at 76.1 per cent and 99 bids.
Making Hay While the Sun Shines was the sale by a deceased of a two bedroom split level residence at the Phoenix Apartments in Kensington in Sydney’s inner east.
The apartment at 414/14-18 Darling Street sold for $1.55 million, about $100,000 over reserve and ahead of the scheduled auction, according to sales agent Alexander Phillips of PPD Real Estate.
“It gives a good indication of where the market is at the moment,” Mr Phillips said, noting that there are more shoppers now that lockdowns are over but outbound travel has yet to recover.
“More stocks will come into the market every week from now on, and then you’ll find that the market is likely to go down. It’s supply and demand and they, the providers, are in the box in January.”
Meanwhile, the first leg of a 146-property portfolio auction called The Event, conducted by Ray White Surfers Paradise and held annually on the Gold Coast, achieved a 95 percent sell-through rate.
“These properties are selling well above reserve which shows the strength of belief in the Gold Coast,” said Auctioneer Andrew Bell, Managing Director of Ray White Surfers Paradise.
January auction listings early surge is coming while jitters about rising interest rates begin to eat into global financial markets. Last Friday, Australia’s stock market tumbled to its biggest weekly loss since 2020 as investors anticipated expected rate hikes to control inflation.
AMP Capital chief economist Shane Oliver expects the Reserve Bank of Australia not to hike rates before August. but fixed-rate mortgages are already moving higher.
“Buyer interest is still there, but it’s waning because interest rates have gone up and affordability is poor now,” he said The Australian Financial Report.
“We are getting closer and closer to RBA rate hikes. In the meantime, we see bond yields continue to rise, which will keep upward pressure on fixed rates.
“It doesn’t affect existing borrowers because they’re all tied. But it’s affecting new borrowers, and they’re the ones driving house prices up.
“The mortgage rate environment is turning against the real estate market. Later this year we will see variable interest rates rise, affordability has deteriorated dramatically and the impact of stimulus is fading. It’s just gotten a lot tougher.”