Clearance rates in Australia's capital cities have fallen to a six-year low, with fewer than half of homes at auction finding buyers. This was reported by Qazaqyia.kz citing The Guardian.
Preliminary data from Cotality shows 47.4% of homes that went to auction sold in the week ending Sunday 21 June. That figure is a weighted average encompassing different rates in different capitals, but the numbers are striking across the board.
In Sydney, the clearance rate was 47.4%, with 166 homes withdrawn from auction. In Melbourne, 50.6% of homes sold under the hammer. In Brisbane, just 33.3% of homes found buyers. Perth and Adelaide both saw auction rates of 40%, with Canberra at 47.1%.
Clearance rates that low were last seen in April 2020, at the outset of the Covid pandemic.
Annabelle Mezieres, an economist at Cotality, said the property company expects auction rates to ease even further in the future. "Auction volumes look set to ease further over the coming weeks, partly a seasonal trend but also likely in response to weaker selling conditions," she wrote in a statement, noting nearly 24% of scheduled auctions were withdrawn and nearly half, 48%, sold before going under the hammer.
The revelations come less than a week after the Reserve Bank kept interest rates on hold at 4.35%, a decision that, while expected, will still see many mortgage holders on much higher repayments than earlier this year. The RBA had already agreed on three consecutive rate rises, and the central bank's governor, Michele Bullock, said last week another remains on the table because prices were still rising too quickly.
Housing will play centre stage in parliament this week as lawmakers move to debate the government's overhaul of the capital gains tax discount and negative gearing, as proposed in May's federal budget.
Jane Hume, the deputy Liberal leader, criticised the Labor government's plans to roll back negative gearing and limit the capital gains tax discount on Monday morning, calling them "entirely unfair". She accused lawmakers in government of pulling the ladder up behind them after "plenty of politicians" had used negative gearing to increase their own wealth.
Tanya Plibersek, the minister for social services, said the government doesn't expect house prices to fall but to grow more slowly, saying the changes were all about aiding first home buyers.
But Greens senator David Shoebridge said the auction clearance results showed the market was "broken". "Yes, no one is selling, but no one is buying because it doesn't matter what Labor does with its messaging, their changes are not fixing the fundamental dynamics that people cannot afford a house in this country", he said.