More than 5000 homes are set to go under the hammer this week – the highest volume so far this year – as vendors rush to sell before interest rate rises trigger a sustained fall in house prices, data from SQM Research shows.
“Vendors are racing to sell to make the most of the current strong prices and before the market softened further,” SQM Research managing director Louis Christopher said.
“Sellers now understand that this is probably as good as it gets when it comes to selling, with the federal election and rate hikes looming, buyers are likely to stay on the sidelines.”
The prospect of weaker prices has prompted Melbourne man Mark Beaconsfield to sell his family home. It is scheduled to go to auction on Saturday.
“I think it’s a good time to sell now because I think once interest rates start to rise, the market will soften,” he said. “So it’s kind of our last chance to get into a growth market.”
Mr Beaconsfield said the property on the Mornington Peninsula had attracted a large number of potential buyers, and he was hopeful of getting a good price.
“We had a number of parties coming through during the open homes, and we’re hoping the house will fetch a good price,” he said.
“Our agent, Michelle Bennie at Ray White, has been guiding between $950,000 and $1.05 million, hopefully we get more than that.”
The shift in buyer demand had spurred many vendors to sell now rather than risk trading in a falling market, said Raine & Horne selling agent Tom Fernon.
“Vendors want to sell at the top of the market, and before prices cool, so there’s certainly a sense of urgency for some,” he said.
This Saturday, 3116 homes are scheduled to go under the hammer across the country, making it the biggest auction weekend this year so far, Domain says.
A total of 1177 homes are set to go to auction in Sydney on Saturday, a 28.6 per cent rise from the previous week.
Auction volume lifted 19.3 per cent to 1496 in Melbourne, it jumped 63.4 per cent to 183 in Adelaide, it climbed 36.3 per cent to 124 in Canberra, and was steady at 128 in Brisbane.
The upcoming, back-to-back, long weekends has condensed auction activity this Saturday to provide bumper choice for buyers, said Nicola Powell, Domain’s chief of research and economics.
“I think the higher auction volume is going to dilute that buyer demand because there’s simply a lot more choice, so we’re likely to see clearance rates soften across most capitals as buying conditions improve,” she said.
Last week, Sydney’s final clearance rate rose slightly by 1.9 percentage points to 68.1 per cent from the previous week, while Melbourne notched a 2.1 percentage point rise to 69.1. The combined capitals climbed by 1.8 percentage points to 69.4 per cent.
While clearance rates have increased slightly this week compared to the previous week, they remain significantly per cent lower than this time last year.
Sydney’s clearance rate has dropped 9.3 percentage points over the year, Melbourne was lower by 3.4 percentage points and was down by 5 percentage points across the combined capitals.
Eliza Owen, CoreLogic’s head of research, said while there were still plenty of active buyers, their numbers had dwindled from a year ago.
“I think between falling clearance rates, sales volumes, price indicators and days on market, we’re starting to see all this evidence that demand isn’t keeping the pace it was late last year,” she said.
“It’s a little different for smaller markets, and regional markets, with momentum slowing only marginally across the ACT, Adelaide, but in the big cities things seem to be slowing.
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/sellers-storm-the-market-ahead-of-interest-rate-hikes-20220407-p5abp5