CoreLogic recorded a 70% final auction clearance rate across the combined capital cities, which followed the previous week’s 70.7% result.
It was the second consecutive week a clearance rate of 70% or above was recorded this year across the combined capitals.
Sydney and Melbourne again drove the result, recording clearance rates of 72.1% and 69.6% respectively:
The rebound in clearance rates is being reflected in prices, with CoreLogic’s daily dwelling values index recording 2.5% quarterly value growth across the five major capital cities:
CoreLogic’s research director, Tim Lawless, believes the rebound in the housing market is being driven by FOMO (‘fear of missing out’).
“Fear of Missing Out (FOMO) or buyer concern about being left behind was at its peak when the market was in full flight in 2021”.
“While the trend is not back, yet, it does appear that some buyer demographics are highly motivated to get into the market”, Lawless said.
“There’s not a lot of competition in the market for vendors currently with decade-low listing numbers. It’s one of the reasons selling conditions have strengthened”.
“For context, the total number of homes listed for sale nationally is tracking 28% below usual”.
“If the trend for low advertised stock levels, rising clearance rates and higher values continues, it would not be surprising to see FOMO becoming more pervasive”.
“As demand picks up against strong overseas migration and extremely tight rental markets, there’s likely to be some renters who try to fast track their purchasing decisions as well”.
“The pool of available properties they’re competing for is the smallest it’s been in more than 10 years. A sense of urgency will likely play a part in some decision making over winter”, Lawless warns.
Tim Lawless’ analysis is sound.
The larger-than-expected increase in net overseas migration has produced significant extra housing demand at a time when the rental market is experiencing record tightness.
This massive increase in demand at a time of limited supply and skyrocketing rents is fuelling FOMO and the current price rebound.
The only thing holding prices back is the substantial reduction in borrowing capacity caused by the Reserve Bank’s 3.75% of interest rate hikes.
When the Reserve Bank eventually begins its rate-cutting cycle, borrowing capacity will increase, and house prices could launch into the stratosphere.
