Australia’s auction market performed solidly again over the weekend, despite a high number of listings.
According to Cotality, the national preliminary auction clearance rate rose to 73.8%, up from 73.0% the weekend prior and 58.2% in the same weekend of last year.
Source: Cotality
“The clearance rate is an indicator that prices are going to continue to rise through spring”, Domain’s research chief, Nicola Powell, told The AFR.
“[The high clearance rate] really shows that the depth of demand is there. We’re now well into spring and auction volumes are much higher … the last few weeks have really demonstrated that buyers are coming to the party”.
“What we have seen is a consistent increase in the number of homes actually selling before auction. That really tells us a lot about market conditions, and it tells me that we’ve got rising momentum”, she said.
Louis Christopher, founder and managing director of SQM Research, agreed that the clearance rates were signs of a healthy and strong market, fueled by falling interest rates and the federal government’s 5% deposit scheme for first home buyers.
Cotality’s daily dwelling values index has risen by 0.9% over the past 28 days across the five major capitals, which is the strongest growth since October 2023.
The rise in demand and prices comes amid a 15.1% decline in overall for-sale listings in the year to 19 October, according to Cotality:
Source: Cotality
In his weekly market wrap on YouTube, leading Sydney auctioneer Tom Pano, who sold nine out of 11 homes auctioned on Saturday, argued that the government was making the housing crisis worse by pump-priming demand.
Panos stated explicitly that the “5% scheme that kicked off on the 1st of October is having an impact, no question about it”. He also stated that the “government is inflating prices” and “Anthony Albanese is making the property problem and the housing issues Australia has not better, worse”.
Panos also warned against utilising the 5% deposit scheme and borrowing too much, noting that “if you’re scrimping to get 5%, I don’t think you should be buying a property”.
The price cap for Sydney has been set at $1.5 million. And Panos noted that if someone utilised the 5% deposit scheme in Sydney and borrowed $1.4 million, then “your loan repayment is over $8,000 a month. Not one month, not two months, every month. So, be mindful of it”.
Sadly, these sage words will be ignored and many first-home buyers will sign up for decades of mortgage slavery, egged on by the Albanese government.
The end result will be the same as always: larger mortgages, higher prices, and a less affordable housing market overall.
