Australian Home Auctions Decline as Rate Hikes Dampen Activity Brett Miller The number of homes auctioned in Australia dropped over the past week as interest rates at a 15-year high weigh on activity in the housing market. Just 1,423 homes were auctioned in capital cities, down 18.6% from a week ago and about 46% lower than the same time last year, according to data from Cotality. The property researcher said its data suggest activity is set to decline again in the week ahead.
The clearance rate from auctions edged up to 51.2%, from 48.8% a week earlier, the data show. Still, the preliminary clearance rate for the Australian spring season so far of 52.0% is below the winter average of 52.3%, according to Cotality. Activity in Melbourne dropped sharply after the introduction of new disclosure requirements on reserve prices, with 500 homes put up for auction, down 28.9% from a week ago, Cotality data show.
Auctions are a popular way of selling houses in Australia, particularly in the largest cities of Sydney and Melbourne, where competition for desirable homes in established suburbs can attract numerous buyers. High borrowing costs, though, are reducing the appeal of the strategy. Australia’s central bank raised interest rates last month to 4.6%, the highest since 2011, in an effort to cool inflation.
That was its fourth hike this year, and its impact is likely to continue weighing on property prices.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing