This month’s 0.25% interest rate hike from the Reserve Bank of Australia (RBA) has failed to slow the housing market, with the nation’s final auction clearance rate rising to 66.9% last weekend.
That was the strongest result since late February 2022 (70.9%), and was up 3.7 percentage points from the week prior (66.2%).
Sydney (73.0%) led the way, recording its highest clearance rate since the week ending 13 February 2022 (75.4%).
The rebound in auction clearance rates is being matched by home prices, which also rose strongly despite the RBA’s latest rate hike.
In the week ended 11 May, CoreLogic’s daily dwelling values index rose by 0.31% across the five major capital city markets.
That was the strongest weekly price increase since mid-October 2021:
So far in May, dwelling values have lifted by 0.39% at the 5-city aggregate level, with all major capital city markets recording rising prices:
Since bottoming on 7 February 2023, dwelling values at the 5-city aggregate level have rebounded by 2.1%:
Sydney continues to lead the nation’s house price recovery, recording a strong 3.7% rise in home values since 7 February, with values across the other major capitals also rising by smaller amounts.
Despite the typical seasonal slowdown at this time of year, capital city auction activity is likely to increase in the coming weeks, with around 1,950 homes scheduled for auction next week and approximately 1,900 auctions slated for the final week of May.
This anticipated increase in supply will be the litmus test of whether the RBA’s latest tightening has dented housing demand enough to stall the recovery.
I can’t see the picture changing unless the fixed rate ‘mortgage cliff’ suddenly causes a wave of forced sales, and/or the RBA decides to lift rates more aggressively.
