AUSTRALIA (Commonwealth Union)_The seminal publication, which summarises the country’s annual property performance and forecasts for the coming year, demonstrates the diversity of market circumstances across geographies, price groups, and property kinds.
Eliza Owen, CoreLogic Head of Research, noted two significant characteristics of capital growth trends in 2022 while summarising the year that was. The first was that market headwinds did not affect all housing markets consistently. “More costly markets witnessed harsher reductions, whereas the more affordable portion of the market, which purchasers often do not have to extend themselves as much to buy into, exhibited stronger resilience to interest rate increases,” she said.
“The second trend is the speed of deterioration has been moderating on a broad basis since September. While this may be viewed positively by some, there is still a chance of the slide resuming in the coming year.”
Kaytlin Ezzy, CoreLogic Economist, adding that a prominent topic was the Australian housing market’s tectonic shift in conditions over the last 12 months. “Last year’s Best of the Best recognised some of the biggest annual sales turnover and value growth on record. This year’s research looks at some of Australia’s most resilient markets as we enter one of the country’s fastest interest rate tightening cycles in history,” Ms Ezzy said.
National housing values declined -3.2% year on year to November, driven by a -5.2% annual decline in capital city dwelling values, while regional dwelling values gained 3.3%. Residential real estate’s expected total value fell from $9.6 trillion in December 2021 to $9.4 trillion in November 2022. Annual sales are expected to fall -13.3% year on year until November 2021, with around 535,000 homes sold nationally.
Important takeaways
It’s that time of year when many of us start slowing down and planning our vacations rather than our real estate markets. Despite the fact that it was one of the busier weeks for the Melbourne and Sydney auction markets this year, auction clearance rates continued to slip. Sydney home prices declined -0.3% over the previous week, down -1.3% over the last month and dropped -11.3% over the last 12 months. Melbourne home prices fell -0.4% in the previous week, -0.8% in the previous month, and -7.5% in the previous year. Brisbane house prices down -0.4% from the previous week, -1.8% over the previous month, but are up 2.1% over the previous year.
Overall, capital house prices in Australia fell -1.1% in the latest month and are down -6.1% year on year. The underlying tone of the housing markets towards the end of the year remains slow. However, auction sales activity this past weekend increased considerably, although on a more orderly note, with similar numbers of pre-auction purchases and a small number withdrawn before sale.
This week, 2,667 properties were auctioned in the combined capital cities, making it the largest auction week since late May. (3,226). Despite an increase of 5.1% from the previous week (2,537), the same week last year saw a record-breaking 4,981 properties sold at auction across the combined major cities. So far, 57.9% of the 2,024 results obtained have been successful, the lowest preliminary clearance rate since the week ending July 24th.
Last week’s preliminary clearing rate was 4.0 percentage points higher (61.9%), but it was revised down to 57.8% at the end, whereas 64.0% of reported auctions were successful at this time last year. Melbourne had its busiest auction week since mid-June (1,266), with 1,182 properties sold at auction across the city, a 2.1% increase from the previous week (1,158).
So far, 59.4% of the 946 results obtained have been successful, a -3.0 percentage point decrease from last week’s preliminary clearance rate (62.4%), which was revised down to 58.6% at the final statistics. Last year at this time, 63.3% of reported auctions were successful. This week, 960 houses were auctioned in Sydney, a 7.7% increase from the previous week’s 891 auctions, making it the city’s busiest auction week since late May. (1,109).
