The latest interest rate hike from the Reserve Bank of Australia (RBA) has failed to dampen enthusiasm in the housing market.
The final auction results from last week were solid, with 66% of the homes sold and February’s clearance rates rebounding from late last year:
The momentum continued this weekend, despite a strong uplift in auction volumes.
The preliminary clearance rate across the combined capital cities was 70.7%, with all of the major capitals recording results above 70%:
Source: Cotality
While this weekend’s preliminary clearance rate was down on last weekend’s 73.7%, it was significantly higher than the same weekend last year, when only 63.8% of homes that went under the hammer sold.
This weekend’s auction volume of 2,051 was also 29% higher than last weekend and around 9% above the same weekend last year.
Every capital city recorded more auctions this weekend than last week and than last year.
Melbourne recorded a 38% lift in auction activity this weekend, with the preliminary clearance rate also nudging above 70.6%—the first time Melbourne’s preliminary clearance rate has been above the 70% mark since mid-November last year.
Sydney recorded a 29.5% increase in the number of auctions held this weekend compared with last weekend. However, Sydney’s preliminary clearance rate of 70.1% was significantly lower than the 79.6% recorded a week ago.
As illustrated below, Cotality’s daily dwelling values index has also held firm in the face of the latest rate hike, although value growth continues to be driven by the smaller main capitals of Perth, Brisbane, and Adelaide:
The latest Westpac-Melbourne Institute Consumer Sentiment Survey showed that Australian house price expectations were tracking at their highest levels in 15 years. However, fewer consumers believe that now is a good time to purchase:
Chart by Shane Oliver (AMP)
It will be interesting to see how sentiment and house prices hold up if the RBA delivers further interest rate hikes and the Albanese government cuts the capital gains tax discount.
