Housing Demand is Strong, with Capitals Clearance Rate at 6-Week High

CoreLogic released their Property Market Indicator Summary last week, and it revealed some good news for sellers.

Clearance rates hit a six week high across the combined capitals, after six of the capital cities clocked a week on week increase, bringing the combined capitals clearance rate to 74 percent.

It comes as auction activity experienced a lift for the second week in a row, with 2,056 homes going under the hammer across the country.

According to CoreLogic, the week ending the 20th of August was the busiest week we’ve experienced since before Easter in terms of auction activity, and marks itself as the 5th strongest for the year so far.

The strong auction figures are typically uncharacteristic for this time of year, with numbers usually dropping off in winter, and rebounding in Spring.

But the increase in auction numbers this week might be an early indication of rate stability infusing more confidence in the market.

Additionally, sellers might have been enticed by widespread lifts in home values since earlier this year.

Last month, July also saw a lift in listings, prompting CoreLogic’s head of residential research, Eliza Owen, to offer some potential explanations for the unseasonal uplift. Rising values were also on her radar.

“There could be other reasons for an out-of-season uplift in new listings. As we have noted previously, new listings activity has often been led by a rise in home values and better selling conditions, with every 1 percent increase in home values annually translating to an average uplift of half a percent in new listings,” said Ms Owen.

“With home values rising for the past five months, this may be prompting more selling decisions that did not take place when the market was in decline last spring. 

“Some prospective sellers may also be looking to get ahead of the spring selling season when competition among vendors is likely to be more intense, a tactic which has been noted in liaison with some real estate agencies.”

As for the increase in clearance rates, there’s been talk of an element of FOMO (fear of missing out) infiltrating the market, and prompting buyers to return earlier than expected, prior to rates being cut. A sense of urgency has been reported in the purchasing market.

Research released by PropTrack  this month revealed that auction clearance rates have held 23 percent higher than this time last year.  

PropTrack senior data analyst, Karen Dellow, also noted that in the past four months, more highly engaged buyers have interacted with the Realestate.com.au platform than at any other time since 2019.

Ms Dellow notes that the positive increases in selling indicators are uncharacteristic for the cooler months, but are perhaps based on an element of impatience. 

“July and August are traditionally quieter months with many buyers and sellers opting to hold off until the start of spring. However, so far this year we have seen some unseasonal trends across Australia that suggest buyers are not waiting for the warmer weather,” said Ms Dellow.

As CoreLogic’s Eliza Owen mentioned above, some real estate agents have advised sellers to make their moves in the market now, to beat vendor competition and take advantage of the recent house price growth.

And it’s entirely possible that a larger number of sellers are seeing this for themselves, and making the choice to sell now rather than later.

“The biggest issue currently facing the property market is the lack of stock, and with demand still high, there is limited choice for those wanting to buy.

“Those selling, however, are benefiting from high buyer demand and low competition from other vendors, which is in large part why prices are on the up,” said Ms Dellow.

As spring approaches and the ‘selling season’ begins, it’s likely we’ll continue to see more listings added to the market. And with the end of interest rates likely just around the corner, customer sentiment could be set to increase too.