Australia’s housing rebound has continued, with CoreLogic’s daily dwelling values index reporting a 0.21% increase at the 5-city aggregate level in the week ended 8 June:
The quarterly rate of growth also lifted to 3.2%, led by Sydney where values surged by 4.7%:
The house price rebound is also reflected across the auction market where a 73.1% final clearance rate was recorded last week, with universally strong results posted across the various capital cities:
Source: CoreLogic
This was the fourth week in a row that a clearance rate of 70% or more was recorded across the combined capitals, and was the highest recorded since 13 February 2022 (73.5%).
As illustrated in the next chart, the strong rise in auction clearance rates has led the equally strong bounce in home prices:
There is a perception that the Reserve Bank of Australia’s (RBA) latest 0.25% increase in the official cash rate (OCR) to 4.1% is “one too many” and could derail the housing rebound.
Earlier this week, SQM Research managing director Louis Christopher warned of a possible “double-dip” housing correction, stating that he now expects “distressed activity to rise based on a new round of forced and panicky selling starting sometime the second half of this year”.
Christopher also told market participants “to be prepared for a new round of housing price falls starting in the second half of 2023”.
The nation’s auction market is set to take a long weekend break this weekend, with only 1,088 homes expected to go under the hammer across the combined capitals, down 40% week-on-week.
Nevertheless, the results will be interesting as they could indicate whether the RBA has broken the back of the housing market, which might lead to a double-dip correction.
