Ray White auction results suggest slowdown in housing market
Looking to buy your first home? The latest auction results could signal an important change in Australia’s ‘unstoppable’ housing market.
There’s a small glimmer of hope for Aussie homehunters desperate to enter the country’s roaring housing market, with one real estate giant suggesting property prices could be moderating after years of unstoppable growth.
The latest auctions results from Ray White show auction numbers rising and active bidders falling, leading to a fall in overall clearance rates across most capital cities.
“All of this adds up to a slowing market and price moderation or even falls,” Ray White chief economist Nerida Conisbee said on Monday.
“In August, Ray White conducted 3,534 auctions nationally, an increase of 15 per cent compared to the number of auctions held at the same time last year.
“With auction numbers increasing, we have also seen a fall in the number of active bidders.
“In August, there were 2.7 people on average actively bidding.
“This is a decline from 2.9 people from the same time last year.
“On an annual basis, this hasn’t made much difference to price growth.
“Year-on-year, it has accelerated since last year, but on a monthly basis, it does seem to have resulted in a slow down.
“In August last year, prices increased by 1.1 per cent. This August, they increased by 0.5 per cent.”
But Ms Conisbee cautioned the numbers were not uniform across the country and the apparent slowdown was being driven primarily by the Sydney and Melbourne markets.
Brisbane and Perth recorded an increase in average active bidders and clearance rates from August 2023 to August 2024, the data shows.
Bidders in Brisbane lifted from 3.3 to 3.7, while bidders in Perth jumped from 3 to 3.6.
In Sydney, the number declined from 3 to 2.7 across the year, while in Melbourne it fell from 2.8 to 2.3
Auction day clearance rates have skyrocketed in Perth, jumping from 50 per cent in August 2023 to 85.7 per cent in August 2024.
In Brisbane, clearance rates lifted slightly from 67.3 per cent to 68.6 per cent, while in Sydney they fell from 70.9 per cent to 65.7 per cent.
Nationwide, clearance rates have fallen from 71.4 per cent to 66.2 per cent.
But while the results suggest a possible slowdown, consultant firm KPMG has cautioned house prices will likely to rise for the rest of the year and into 2025.
In a six-month forecast from June, the firm said prices would likely lift 5.3 per cent nationwide to the end of 2024 and then a further 5.6 per cent in 2025.
“In a year of high interest rates and inflation and subdued consumer sentiment the housing market has withstood all those factors and still provided strong price growth, due to demand outstripping supply,” KPMG chief economist Dr Brendan Rynne said.
“Even the much-anticipated ‘fixed-rate cliff’, or the transition of mortgage holders off lower fixed rates to higher variable rates, has only had a mild impact and households have so far coped well with the rate rises, due to a robust labour market and Australia’s historic low unemployment rate.
“Supply has remained insufficient and while we do forecast a slight rise in housing approvals, this will take time to translate into actual housing completions, due to the time lag inherent in the process.
“Although material costs and financing costs have started to stabilise after sustained increases, labour costs continue to increase in response to high demand for qualified tradespeople.
“Many barriers remain to developers building new homes, while continuing high rental costs are pushing renters to look to buy instead, which is pushing up demand.”
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