Australia’s housing market is boiling over amid the sharpest population increase in this nation’s history.
Last weekend’s final auction clearance rate was the highest since February 2022 (71.5%), led by strong results across Sydney (74.7%) and Melbourne (71.7%):
The surge in clearance rates has been matched by prices, with dwelling values across the five major capital cities jumping 3.0% over the May quarter:
Sydney has led the rebound, with values surging 4.5% over the quarter:
Melbourne values have bounced a more modest 1.6%, which corresponds with its softer bounce in auction clearances:
Meanwhile, rents continue to hyperinflate across the major capital cities:
Source: CoreLogic
Record immigration, surging rents, and a general lack of supply of homes to rent or purchase has created FOMO (‘fear of missing out’) in the market, driving up auction clearance rates and prices.
Property listings are tracking way below the five-year average:
Source: CoreLogic
Whereas rental vacancy rates are tracking near record lows:
Source: CoreLogic
There is also little relief on the horizon given population growth (immigration) is surging at the same time as actual dwelling construction is crashing:
It is a perfect storm that is driving prices and rents higher despite ongoing interest rate hikes from the RBA.
All that is needed is for the RBA to start cutting rates late this year or early next, and house prices will explode.
