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

Two opposite colored terraced townhouses against a blue Sydney sky
Hot or cold market?

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.

House hunting? Auction rates plateau as supply shrinks

An angled row of terrace houses on a sunny Sydney lane

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.

CanberraBrisbaneAdelaidePerthHobart
Auctions88189160181
Preliminary sales rate88%68%78%100%0%

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?

An interracial family smiles in front of their new Sydney home

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.

Compare and save on home loans - last updated 11 August 2022

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
  • Smart Booster Home Loan

    2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    3.60% p.a.variable for 24 months and then 4.00% p.a. variable
    3.96% p.a.

    Already includes July RBA rate increase. New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

    Details
  • Unloan Variable

    Owner Occupier, Refinance Only

    interest rate
    comparison rate
    Initial monthly repayment
    3.14% p.a. variable
    3.06% p.a.

    For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

    Details
  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

    Details
  • Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    3.79% p.a. variable
    3.79% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required.

    Details

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.