Spring Property Market: Busy Auction Week Ahead and Housing Targets in Focus

Spring is upon us which means we’ve entered the season for selling, when home buying and selling activity typically ramps up.

But this year’s property market has proven to be far from typical, with house prices remaining resilient to rate rises, and as the ABC puts it, defying gravity.

So with that in mind, what seems to be transpiring in the first couple of weeks of Spring? 

Well, with 2,436 homes scheduled for auction this week, we’re about to experience the second busiest auction week so far this year. If that’s anything to go off, Spring could be shaping up to be a lively one. 

To gain a deeper insight, let’s take a look at the biggest developments to come out of the property market this month.

Auction activity set to ramp up

As CoreLogic reported this week, we’re set to experience the second busiest auction week this year, with auction activity up 7.1 percent compared to last week, and up 10.6 percent compared to the same period last year.

Last week’s auction activity was a promising sign, with preliminary clearance rates for the combined capitals improving 50 basis points on the week prior. The portion of homes passing in at auction also dipped to its lowest rate since last March.

Of last week’s results and this week’s auction numbers, CoreLogic’s Kaytlin Ezzy said the clearance rate will be the most telling figure to watch.

“With just shy of 2,450 auctions currently scheduled across the combined capitals this week, this year's spring selling season is shaping up to be significantly busier than last spring,” said Ms Ezzy.

“The clearance rate will continue to be an important indicator of whether the market can absorb the additional supply.”

Budget set to focus on home buyers

Headlines this week have speculated about next week’s state budget announcement and what the budget might mean for housing.

Many are wondering how NSW intends to achieve their share of Anthony Albanese’s ambitious goal to build 1.2 million well-located homes over the five years from July 2024.

New South Wales treasurer, Daniel Mookhey, was questioned about the housing crisis when he appeared on SkyNews this week. He noted that strategies are being put in place to address the lack of affordability.

“You can expect a housing strategy that is designed to help people own their homes and equally to assist those who are renting in next week's budget. We have signed up to some pretty aggressive targets working in partnership with the Albanese government,” said Mr Mookhey.

When questioned about what specific steps the government is taking to meet the targets, Mr Mookhey noted that land audits were already taking place.

“We have already commenced an overhaul of the NSW planning system. Secondly, we have audited all government land to find places where we can inject additional housing supply quickly and yes we are pressure testing major metropolitan rail projects to ensure that if we’re going to make an investment of this scale we are yielding a strong housing result,” said Mr Mookhey.

The budget is set to be unveiled next week and is the first Labor state budget in ten years.

HAFF bill to be passed in senate

This week also saw the Housing Australia Future Fund Bill finally get the tick of approval from the Greens Party, after being deadlocked in the senate back in June.

The Greens Party had previously declined to back the bill unless rent caps and freezes were implemented. But after the Albanese government pledged an additional $1 billion to support social and affordable housing, the parties have come to an agreement.

Prime minister Anthony Albanese praised the move, thanking the parties for their support of the bill.

"Today we have committed an additional $1 billion in funding for the National Housing Infrastructure facility to build more homes for Australians who need them," said Mr Albanese.

"I thank the crossbenchers in this chamber and in the other chamber for joining with the Labor government to make sure this is done."

Developers doubtful 1.2 million homes will be achieved

The Australian Financial Review held their Property Summit this week, bringing together industry experts and leaders to discuss the desperate housing crisis at hand.

When the topic of the Albanese government’s 1.2 million new homes arose, the general consensus seemed to be one of skepticism.

According to Michael Bleby, senior reporter at the AFR, a number of senior figures in the property industry voiced their concerns at the summit.

In his article, Mr Bleby refers to comments from Robert Lynch, the chairman of Tamawood - a residential building company. Mr Lynch was straightforward on the matter.  

“It doesn’t matter what number they make it, whether it’s 1.2 million or 5 million, it’s all the same. We won’t be getting there,” said Mr Lynch 

“There’s a problem with local government. In NSW, it’s taking seven to 20 years to get a new rezoning through for residential. We’re talking about building houses over the next five years. That’s a bit of a problem,” he said.

“After you get your rezoning through, it takes you – for a decent size development – three years to get a [development application] through and when you eventually get your DA through, you’re 23 years older.”

A number of other industry experts also named local and state government planning processes as the greatest inhibitors of housing development, while others, like Satterley Property Group’s CEO, Nigel Satterley, named labor shortages, among other industry constraints.

While the construction industry has been plagued by material, labor and approval process constraints, there is newfound hope in the recently approved HAFF bill, and in the cash incentives on offer to the states who exceed their share of the housing target.

The question still remains, will the incentives be enough to convince local governments to abandon their longstanding and problematic NIMBY approach, and enable much-needed building projects?