Autumn property: How to stay ahead as the auction market heats up

Autumn property season
Photo by Aaron Burden on Unsplash

With the middle of autumn just around the corner, the property market is gearing up for its second busiest season of the year. 

The housing market, which was already bustling thanks to record low home loan rates, has gained even more momentum in the period leading up to Easter. In the past week, the volume of capital city homes going to auction reached a three-year high, but average clearance rates didn’t falter at all, hitting 84% according to property research group CoreLogic. 

In case you missed the headline numbers, Sydney led the way, with 1,392 auctions returning clearance rates of 89%. Melbourne also performed strongly with 84% out of 1,899 auctions reported to be successful so far. 

Mozo’s property expert, Steve Jovcevski says the pre-Easter weekend was a test to see if the property market would hold up amid increased supply, and it has “passed with flying colours.” 

Jovcevski says this trend will persist, if not grow even stronger over autumn up until Anzac Day on the 25th of April. 

“I expect that we’ll see continued high listings during autumn, but in saying that, I don’t think we’re going to see any reduction in clearance rates,” he says.

“We’re in the middle of a property price boom so any increase in supply will likely be met with plenty of buyers to cover off the excess.” 

What’s behind home buyer frenzy? 

There are a number of factors driving up buyer demand, according to Jovcevski. They can be boiled down to urgency and confidence. 

Firstly, with property prices surging and reports of homes being sold for hundreds of thousands of dollars above reserve, Jovcevski says a lot of buyers are rushing to get their foot in the door before prices become unaffordable. 

“That ‘FOMO’ (fear of missing out) is causing people to think that if they don’t get in now, they won’t be able to get in later,” he says.

Secondly, the Reserve Bank has come out and said that they won’t put up interest rates until 2024. Jovcevski says this is giving people the security that rock bottom rates are here to stay for at least the next few years.

Right now the average variable rate in the Mozo database sits at just 3.28% - or 40 basis points below the average rate back in March 2020. The average 2-year fixed rate has fallen even more steeply over the past year to 2.31%. 

The end of the government’s JobKeeper scheme is another reason for people’s decision to buy now. Commbank recently predicted that as many as 110,000 people could be out of work after JobKeeper’s expiry on 28 March, and Jovcevski says this job insecurity means a lot of buyers are hoping to get a property now before their income or employment situation changes.

“There are still plenty of jobs out there but it’s just that when you switch jobs, it makes it more difficult to get approved for a home loan. So I think that’s giving people more urgency to buy before their circumstances change,” he says.

Top tactics to survive the autumn auctions 

So with buyer competition continuing to heat up in the autumn property market, what steps should you take to maximise your chances of beating other bidders and landing the property you have your eye on? 

Jovcevski has a few tips to help you out. 

  • Get pre-approved for as much as possible: Getting your home loan pre-approved before an auction is crucial, as it gives you a clear idea of how much you can afford. And given that property prices are going up so rapidly, Jovcevski recommends getting pre-approved for the maximum amount possible even if you don’t end up needing that much, as you may have to fork out a larger amount than expected. Generally speaking pre-approval lasts around 3-6 months.
  • Treat price guides with a grain of salt: Jovcevski says price guides are “completely out of whack at the moment because the market is changing from week to week.” So instead of listening to estimates from real estate agents, do your own research. Focus on actual selling prices and look at how much people paid for homes in the area in the past week. 
  • Reset your expectations: “The house you thought you were going to be able to buy at the beginning of the year might now be unaffordable,” says Jovcevski. So it may be time to re-evaluate which homes are realistic for your budget. For instance, instead of a house, you may want to broaden your scope to cheaper options such as units or apartments in order to lower the barrier of entry and take advantage of capital growth in the meantime. 
  • Go big … or go home: In the current climate, you must be fully committed and ready to pay top dollar. “A lot of people will go in half-hearted, but you need to be 100% sure that this is the property you want to buy and just push it all the way to your limit, because at the moment, that’s the only way to get the property. You just need to be the highest bidder,” Jovcevski says. 

Once you’ve found a property you fancy, it’s time to shop around for the best home loan for your needs. Scroll down below for a few competitive deals or jump over to our home loans comparison hub for even more options.

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