Slowing auction rates indicate red-hot Australian housing market might be cooling down

By Evlin DuBose · · 3 min read
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Photo by Brian Babb on Unsplash.

Alongside another unseasonable spate of rainfall, the flash-hot Australian housing sector has experienced a week of cooling off. 

According to data released this week from Corelogic , the number of homes for sale nearly 25% less than what it was this time last year. A total 1,864 auctions were held across the country’s capitals this past week, and only 55% have sold so far – the slowest sales rate since April 2020.

Last year's property boom surged house prices to record heights, but amidst turmoil from inflation and Reserve Bank rate hikes, sales rates have been falling for the last few months. The rising cost of financing a home loan could spell the slowdown experts have been predicting would arrive by 2023.

More homes available in Australian capitals might improve property prices

Collage of people in their homes comparing property prices for their home loan search.

Sydney stayed on top as the busiest market, hosting just over 40% of all Australian capital home auctions. According to preliminary data from Corelogic, 53% sold successfully, a dismal drop and the first true low since 2020. 

Meanwhile, Melbourne’s housing market nearly halved from last week, hosting just 628 auctions. Of results collected so far, 57% were successfully sold, far lower than predictions. This same time last year, 73% of auctions were successful.

Keep in mind though, more homes on the market can mean that the supply outstrips the demand. Given last year’s unpredictability, there may have been more buyers than homes available. 

Across Australia’s smaller capitals, sales rates have fallen dramatically despite ample supply. Of the specific cities, Canberra remains strong with roughly 88% of its 101 properties selling, but the others returned dwindling figures: 

  • Perth sold 50% of 10 properties.
  • Adelaide sold 71% of 108 properties. 
  • Brisbane sold 44% of 105 properties.

A lighter level of competition can mean better pricing for prospective buyers, but this is certainly troubling news for those hoping to hit the market with a sale.

What do falling sales rates mean for the housing market?

Like the rest of the economy, housing is driven by supply and demand. This week, the number of properties on the market seems to indicate we still have plenty of supply – however, the slowing sales rates tell us demand is going down.

Lacklustre demand has already slowed house prices, which Corelogic's dwelling value index falling -0.6% across capitals last month. More buyers often means intense competition and price hikes, which partially fuelled the 2021 boom, but unenthusiastic buyers means market drag.

For those hoping to break into the property market, auction rate numbers make a critical bellwether for the market with the potential to signal a market downturn.

Outlook for the Australian housing market in 2022

Collage of a man walking down a white crack in a blue field.

Predicting the rise and fall of the housing market can sometimes feel like reading a crystal ball. However, economists and housing market experts have taken stock of the trends and learned valuable lessons from 2021, with many expecting lower sales and falling property prices well into 2023.

Rising interest rates, expensive housing oversupply, and affordability constraints underpin these forecasts: with too many new properties and mortgage rate hikes limiting prospective buyers, we’re unlikely to see the sale rates that caused the 2021 Australian property boom.

Considering this week’s Corelogic report, we may already be seeing the effects of these changing market dynamics. 

In the meantime, if you’re considering investing in property, we’ve compiled a list of competition home loans on offer.

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 30 October 2024 Important disclosures and comparison rate warning*

Home loan comparisons on Mozo

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  • Fixed Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    5.93 % p.a.
    Initial monthly repayment
    $2,852
    Go to site

    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
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    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 online in minutes.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $2,852
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    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • Fixed Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    5.93 % p.a.
    Initial monthly repayment
    $2,852
    Go to site

    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $2,852
    Go to site

    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • Fixed Rate Home Loan

    • Owner Occupier
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    • LVR <60%
    Interest rate
    5.59 % p.a.
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    Initial monthly repayment
    $2,867

    Get repayment certainty with HSBC’s low 2 Year Fixed Rate Home Loan. Make up to $10,000 of extra repayments a year. The option to split your home loan between fixed and variable. Plus, score $3,288 cashback when you refinance an existing home loan of $250,000. Must apply by 28 February 2023 and settle by 30 April 2023.

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    5.74 % p.a.
    Fixed 3 years
    Comparison rate
    6.81 % p.a.
    Initial monthly repayment
    $2,915

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

  • Variable Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.98 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,991
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    Competitive variable rate on up to a 30 year loan term. No application fees to pay. Unlimited additional repayments. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
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    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 online in minutes.

  • Discounted Home Value Loan

    • Owner Occupier
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    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.99 % p.a.
    Initial monthly repayment
    $2,995

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Receive $3,288 cashback when you refinance an existing home loan. Minimum loan amount of $250,000, settle within 120 days from applying.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
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    Interest rate
    6.09 % p.a.
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    Comparison rate
    6.22 % p.a.
    Initial monthly repayment
    $3,027
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    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Mortgage Simplifier

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    6.14 % p.a.
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    Initial monthly repayment
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    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Elevate

    • Owner Occupier
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    6.18 % p.a.
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    Initial monthly repayment
    $3,056

    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

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* 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. You can change the loan amount and term in the input boxes at the top of this table. 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.

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