This weekend saw the continuing weakness of the property market as a whole. The only exception being the city of Melbourne where the market remained relatively firm. Auction clearance rates are now below 50% in the major markets of Brisbane and Sydney.
In the case of Melbourne it is felt that it is being driven by a population boom. People enjoy the lifestyle and cheaper housing.
Sydney auction rates this weekend were at 46.5 per cent. This is well below last year's 66.9 per cent for the same weekend, according to Australian Property Monitors. Volume was also sharply down, with more than $100 million less in sales than at the same time last year. The weekend's total of $93.9 million in property sold at auction was well under half of last year's figure of $201 million.
The Brisbane market was much worse, with a puny 20 per cent clearance rate in contrast to 55.6 per cent last year. Volume wise only nine houses were sold, in contrast to 30 for the same weekend last year. Total sales were valued at $5.6 million, well below last year's $12.6 million for the same weekend.
Adelaide auctions fared no better and were also sharply down on last year, with only 19 houses sold against more than twice that number last year. Total sales dropped from a value of $18.5 million to $10.5 million.
The property market in Melbourne remained firmer than in Sydney, and Brisbane with a large number of houses up for sale. There were 654 separate auctions at the weekend some 30 per cent more than last year. The clearance rate remained relatively stable at 65 per cent, better than other capital cities but nonetheless significantly down on last year's clearance rate of 86 per cent. The total value of residential property sold was $232 million, $66 million less than for the same weekend last year.
Head of the Real Estate Institute of Victoria Enzo Raimondo said with 1200 people arriving in Melbourne every week, the market was population driven.
"Melbourne offers a good lifestyle and cheaper housing," he said. "Melbourne is offering good value for money and people are being drawn by that."
He said the federal budget needed to have incentives for housing affordability right around the country and not just for first home buyers. "A lot of focus is given to first home buyers, but they make up less than 20 per cent of the market," he said. "Much of the rest of the market needs assistance as well. The budget has to address affordability across the board."
Chief economist with the Housing Industry Association Harley Dale said the low auction clearance rates were consistent with other indicators showing slowing growth.
"Budget or no budget, it is not rocket science; the interest rate rises have had a significant impact on house buying sentiment," he said.
He said core election promises committing considerable money to the housing sector and dealing with housing affordability could provide a boost to the troubled market.
"Our major concern is we clearly have an affordability problem and a lack of rental accommodation," he said. "It is hard to see any relief in the short term. It is going to be a challenging time for buyers around Australia."