Australians continue to weather the storm of dipping property prices as interest rates continue to rise. Unit prices continue to plunge across the country, and CoreLogic’s recent report reveals that the national unit index has fallen by -2.3% over the past four months, with values declining by an estimate of $14,400.
Meanwhile, there were 1,323 homes for auction across the combined capital cities, down from 2,203 in the previous week and -18.6% lower than this time last year. Continue reading to find out which cities lead the unit downturn and auction volumes.
Unit values decline across Australia
With the continuous rate hikes and increase in the cost of living, financial pressures push the demands for units down. In August, capital city units recorded a -0.9% fall – making it the fastest decline seen in unit values in 40 years.
Based on CoreLogic’s recent Australian unit market update, capital cities outmatch regions in unit declines. The unit values in combined capitals are down -2.7% (-$17,500) since April 2022. In comparison, regional units appear to handle the fall better with values declining by -1.3% (-$7,000) since peaking in June.
Hobart and Sydney led the largest decline in unit values with -1.7% and -1.5% respectively. Meanwhile, Melbourne fell by -0.6%, Canberra recorded its second month-on-month decline with -1.2% lower than the peak levels in June and Brisbane’s unit values decreased by -0.2%, making it the first fall since October 2020.
CoreLogic Economist Kaytlin Ezzy reminds, “The current tightening cycle has seen the cash rate rise 2.25% in just five months, the fastest increases seen since 1994. While Australia’s unit market has been somewhat more resilient to falling values than the detached housing segment, it has not been immune, with many households being sensitive to increased interest rates due to high debt levels along with high inflation.”
Check out what It’s Simple’s managing director, Joseph Daoud, shares about the Australian property market in 2022:
Preliminary total auctions in capital cities
Based on CoreLogic’s recent Property Pulse, Sydney led this week’s auctions with 808 homes, 4.7% up from 772 last week, making it the city’s busiest auction since late July. Following Sydney is Melbourne with 132 auctions, the lowest record since mid-January. The downturn in auction activity can be attributed to the unexpected memorial public holiday for the Queen and the AFL Grand Final in Melbourne.
Of the smaller capital cities, Brisbane still led auction activities with 140 homes up for auction (-18.1%), followed by Canberra with 117 (13.6%) and Adelaide with 116. This decreases the auction activity this week by -9.5%.
Preliminary total clearance rate
While preliminary clearance rates across the combined capitals fell, they are still above the 60% mark across the combined capitals with 60.6% of the 1,028 results marked successful.
Melbourne’s preliminary rate increased by 1.7% to 66.0%. This marks the city’s highest preliminary rate since early May. Last week, Melbourne recorded 64.4%, which was later revised to 62.4%.
Following Melbourne is Sydney with a 60.6% preliminary clearance rate with 672 results collected. This is up by 0.40% from last week’s preliminary rate of 60.2% (revised to 57.1% at final figures).
Among the smaller capital cities, Adelaide still led the preliminary clearance rate with a record of 70.3%, followed by Canberra with 57.0% and Brisbane with 52.6%. On the other hand, 1 out of the 3 results collected so far in Perth turned successful. Tasmania’s 1 out of 2 auctions was also a success.
With the auction volumes still above the 60% mark for four consecutive weeks and property prices now favouring buyers, now might be the time to refinance your home, as valuations may begin to decrease.
In case you missed last week’s property market report, you can still read the previous auction clearance rates in our blog.
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