The weekly data released by CoreLogic has suggested that the Australian property boom may finally have peaked, with clearance rates now falling across the major capital city auction markets.
Volumes continue to rise, suggesting that vendors are still looking to cash in on the hot property market, but the fall in successful listings indicates that demand is tapering off.
Clearance rates in Melbourne and Sydney were down to 72.7% and 73.4% respectively. On the same weekend last year, clearance rates were around 70% in both cities.
Brokers and buyer’s agents on the ground in capital cities have seen the market begin to fall in recent weeks.
“We saw a massive boom in September, once Melbourne came out of lockdown,” said Damien Roylance, a broker at Entourage and Melbourne property market expert.
“There was a lot of pent-up demand. Now, as things have opened up, we’re getting agent feedback that people have other stuff to do. They’ve been able to travel interstate, they’ve been able to go out for dinners, schools are back. They might not have been as focused out of lockdown.”
“The next thing is that the media has jumped on the fixed rates going up. They play a negative role in the mindset of people by saying that things might slow down. We’re seeing the short-term effects of that, even though variable rates are going down.”
“As things go back to normal, the heat of the market which has been immense in the last 12 months will balance off. I was at an auction at the weekend and it was like pulling hen’s teeth, it was nothing like September.”
Australia’s property market might have peaked in Sydney and Melbourne
The pace might have dropped in Sydney and Melbourne, but outside of the capital cities, it shows no sign of slowing down. Newcastle recorded a sale of $8.7m this weekend, thought to be the highest value for a house in the history of the city.
“We’re seeing a lot of prospective purchasers look at Newcastle with a different lens to what they would have a couple of cycles ago,” said Mark Kentwell of PRD Newcastle.
“Particularly the non-local market that is coming from Sydney and Melbourne, where they have seen that the new post-Covid lifestyle has awakened employees and employers to the fact that you can work a little away from the capital city offices.”
“Newcastle is the one that keeps coming back as a winner on the categories that need to be ticket for sustained growth.”
“We see property drivers that have kept out cycle a lot smoother than Sydney or Melbourne: if you go back a couple of cycles within our LGA, you’ll see that we have growth at the same time as the capital cities, but the curve seems to extend a little longer and then smooth out a lot more when it does pause.”
“This time around, we’re not expecting that much of a pause because, on top of the price growth drivers, the population growth, new money and new desire to purchase here is adding on top of the things that we already made us robust.”
