Australia’s auction market is ending 2024 with a whimper. Over the weekend, the national preliminary clearance rate was 62.4%, down a full percentage point from the week before and the lowest preliminary result so far this year.
Source: CoreLogic
The weak result reflects weaker selling conditions as advertised stock levels rise without a commensurate lift in buying activity.
Sydney drove the decline, with its preliminary clearance rate slumping to only 58.2%, the lowest of the year and nearly 8 percentage points lower than the week prior (65.1%, which revised down to 58.2% on final numbers).
Prices are reflecting the slump in auction clearance rates, with CoreLogic’s daily index trending sharply lower.
At the 5-city aggregate level, dwelling values were unchanged of the past 28 days, driven by declines in Sydney (-0.3%) and Melbourne (-0.4%).
In his weekend market wrap, prominent Sydney auctioneer Tom Panos commented that there is a lot of stock on the market and that it is a “buyers market”.
Panos also noted that high rates of immigration have propped the market up and prevented prices from falling:
“There is no question about it. There is pain out there and I think to myself if we did not have the amount of migration that we’ve had, prices would have gone back a lot harder across Australia. It is just that we’ve had this migration.
“The data is very clear, the government is failing on two KPIs”.
“They were trying to slow down migration. They’re not. They were trying to build more homes. They’re not. End of story. That is a fact. These are black and white numbers”.
“If you want to ask yourself why we have a hot housing crisis where you have Australians—people that have been paying taxes here for decades, people that are essential workers—these wonderful human beings and citizens of this country often cannot even rent a property out”.
“I mean, let’s face it. In parts of Sydney, you are now paying a grand a week to rent. In some areas, two grand a week”.
Panos’ assessment is spot on. Without net overseas migration, Australia’s population would not grow. We would not have a housing shortage.
The surge in immigration has driven a structural shortage between housing supply and demand.
This record immigration has driven an extreme increase in rental prices.
It has also propelled prices higher, despite 4.25% of interest rate hikes by the RBA.
In other words, blame the federal government for engineering Australia’s housing crisis.
