Australian property remains busy, so was the cooling home market talk too early?

We’re back with our housing market crystal ball, deciphering the latest prophecies from Corelogic . 

Last week was odd for the Australian property market, to say the least. The capital cities held relatively fast and steady in their clearance rates, curiously unaffected by recent flooding on the east coast.

However, the market appears to have slumped overall. The number of homes and successful sales decreased almost across the board, especially compared to last year’s staggering stats.

While house prices are likely to remain eye-watering until 2023, experts have been predicting an imminent cool-down to the red-hot market. Do these numbers uphold their chilly forecast? Let’s dive in.

Across the combined capital cities this week, there were 2,090 homes up for sale – significantly down from last week’s staggering 2,979 and last year’s 2,218 over the same week. This drop mostly comes from Melbourne, whose market more than halved thanks to the Labour Day long weekend. 

Of all the homes up for auction, 72% have sold successfully so far, though final figures could be revised down by Sunday. 

This comes off the heels of a relatively chilly week where only 69% of properties sold, compared to the previous five consecutive weeks which all had a strong showing at 70% or above.

Melbourne, usually a property hotbed, was host to only 606 auctions this week, of which 72% have sold so far (compared to last year’s 78%). 

Meanwhile in Sydney, 1,028 homes were taken to auction at a preliminary 70% success rate – hugely diminished from last year’s towering 84%.

Torrential rainfall has seemingly done little to dampen buyers’ spirits, as the auction withdrawal rate only rose to a modest 16% in both Brisbane and Sydney last week.

Across the smaller capital cities, sales rates continued their largely meandering plateau.

Previous housing market slow downs have been attributed to oversupply and buyer hesitancy. However, this week showed us something uniquely worrying: slow or steady sales rates over lower volumes. What does this slothful but diminishing trend mean for housing affordability long-term?

The housing market has been showing worrying signs of fatigue. Taking stock of 2022’s property trends, many experts predict a downturn in the next year or so – or at the very least, a slump.

Lower or steady sale rates, like we saw this week, will likely drive the property prices down over time, with the Commonwealth Bank predicting an 8% drop by 2023. This could hit Sydney and Melbourne the hardest, since last year’s housing mania gave sellers handsome but unsustainable sale prices.

While this could also be great news for first-home buyers hoping to break into a more affordable market, rising fixed-rates and volatile variables keep home loans a significant undertaking. (And the widening gender property gap doesn’t help, either).

All things up: uncertainty surrounding housing affordability and the rising cost of living isn’t inspiring buyer confidence at one end of the spectrum. Those who can invest in property may be excelling, but everyone else is bogged at the startline. 

For more information on property trends, have a look at our home loan statistics for 2022. If you’re in the market, you can compare home loans on offer or browse below.