Home prices to soar as auction clearance rates spike
National prices predicted to surge with almost 90 per cent of properties auctioned in Sydney selling on the weekend.
Home prices across the country are expected to surge as eager buyers push clearance rates significantly higher than this time last year, with almost 90 per cent of properties auctioned in Sydney at the weekend sold.
That compares to just over 76 per cent this time last year, with clearance rates higher in Melbourne, Brisbane, Perth and Canberra, new CoreLogic figures show. The median price of an auctioned home hit $1.12m across six capital cities on Saturday, higher than the $652,000 average recorded in January, traditionally a slower month for sales.
CommSec chief economist Craig James said the surge was being driven by record-low mortgage rates and government grants — but houses, not apartments, were benefiting most.
Michael Hercock and Joanne Hardy — and their children Jude, 13, and Sam, 16 — sold their terrace in Sydney’s inner-city suburb of Glebe for $1.7m, $100,000 over the reserve.
Now they’ll turn their thoughts to their next challenge: finding a new home amid a resurgent property market.
“Jo is a bit concerned about being out for too long but … you have to pay stamp duty and real estate fee so you feel like it’s a lot of money that’s exchanged that’s not returned,” Mr Hercock said.
Their agent, Ray White realtor Matt Carvalho, said he was “absolutely blown away” by the auction result.
“I was very surprised at the result that they got,” he said.
“I knew that the house was going to be popular; there was quite a few key buyers who purchased elsewhere in the weeks leading up to it, but it turned out to be really strong.
“There is that scarcity of good stock. The house market is far more buoyed than the apartment market.”
Mr James said CommSec had forecast house prices across the country to rise by 15 per cent over the next two years, while apartments were expected to increase 9 per cent.
“Consumer confidence has picked up much quicker than expected and owner-occupiers are driving the market, not investors,” he said. “We are seeing a clear disparity between prices growth in houses versus apartments.”
Mr James said the decline in international students, forced to remain overseas due to the coronavirus pandemic, had led to an oversupply of apartments in capital cities.
But the federal government’s HomeBuilder program — which subsidises the construction of new homes — “could see a cap on house prices down the track as well”, he said.
Aussie Home Loans chief executive James Symond told The Australian the surge in property interest was “the culmination of low interest rates, consumers who have saved a truck load of money during the pandemic and an unemployment outlook that wasn’t as bad as we thought”.
“The RBA has indicated that low interest rates will continue for years to come,” he said. “The market is very solid. It’s a good time for families with good jobs and income to get a mortgage and join in this active market.”
Mortgage “holidays” introduced by lenders at the height of the pandemic, however, will finish at the end of March.
“It’s not a holiday, it’s a deferral,” Mr Symond said.
More than two-thirds of Aussie customers who took up the scheme have now restarted repayments, he said.
The most recent data from the Australian Prudential Regulatory Authority, released Friday, shows $37.1bn in home and small business loans repayments are still deferred, down from $50bn in December.
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