Australia’s property market is facing a dire situation as the preliminary clearance rate tumbled below 60% while median property prices declined by -1.2% in October.
Property prices crash across Australia
Australia’s home values fell for the sixth consecutive month as the country continues its fight against high interest rates, inflation and financial pressure.
CoreLogic’s latest home value index showed that prices went down a further -1.2% in October as the national median value sat at $721,018.
Across the capital cities, Brisbane recorded the steepest month-on-month fall with -2%. In Sydney, the price decline eased compared to the past months as the city had a -1.3% slip in October.
Annually, national values dipped the biggest in Sydney (-8.6%) and Melbourne (-5.6%). Since their peak records, Sydney’s home values have decreased by -10.2% while Melbourne has recorded -6.4%.
CoreLogic’s Research Director, Tim Lawless said, “Despite the easing in the pace of decline, with Australian borrowers facing the double whammy of further interest rate hikes along with persistently high and rising inflation, there is a genuine risk we could see the rate of decline re-accelerate as interest rates rise further and household balance sheets become more thinly stretched.”
Preliminary total auction rate
CoreLogic’s figures showed that after recording 2,169 auctions in the previous week, auction rates went down to 1,908 across the combined capital cities this week. This time last year, 3,546 homes were recorded.
As the Melbourne Cup Carnival took over the city, Melbourne’s auction number shrunk to 582 – a huge fall compared to the previous week’s record of 1,163.
On the other hand, Sydney had an upswing this week as 762 homes went under the hammer from 632 last week.
Brisbane remained the busiest of the smaller capitals as the city recorded 218 homes for auction. Following Brisbane was Canberra with 163 and Adelaide with 154. Meanwhile, Perth recorded 28 auctions while Tasmania only had one.
Preliminary total clearance rate
As auction volumes dwindled, preliminary clearance rates fell below 60% for the first time since late August. This downturn could be attributed to surging inflation, interest rates and cost of living that push potential buyers to hit on the brakes.
Of the 1,501 results collected, 59.8% turned out successful – -2.9% down from last week’s early clearance rate of 62.7%.
Melbourne cleared 60.7% of the 494 results collected so far, down by –3.90% from the previous week’s 64.6%. However, Sydney’s preliminary rate increased to 62.3%, an increase of 0.70% from last week’s preliminary record of 61.6%.
Adelaide still recorded the strongest preliminary clearance rate with 68.2%. Coming in second was Canberra with 59.8%, Brisbane with 45.7% and Perth with 38.5%.
With the RBA’s cash rate now at 2.85% and inflation at 7.3%, prices are predicted to go further downhill as property demand softens while Australians try to manage their finance.
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