Fi­nance the stum­bling block for home sales

The Australian - - THE NATION - ELIZABETH RED­MAN

The spring hous­ing mar­ket is look­ing sub­dued, with auc­tion clear­ance rates hov­er­ing above 50 per cent in the two largest cities as buy­ers find it harder to get fi­nances in or­der.

Just 52.6 per cent of Syd­ney homes set for auc­tion at the week­end sold un­der the ham­mer, well down on the 64.2 per cent clear­ance rate this time last year.

Mel­bourne had a suc­cess rate of 57.2 per cent, down from 71.4 per cent a year ago.

The prop­erty mar­ket has come off the boil over the past sev­eral months amid a reg­u­la­tory clam­p­down on lend­ing and af­ford­abil­ity con­straints.

As buy­ers strug­gle to get home loans, fac­ing tougher re­stric­tions on ser­vice­abil­ity and ris­ing mort­gage costs, they may regis­ter for an auc­tion but then have to with­draw, CoreLogic na­tional auc­tion mar­ket com­men­ta­tor Kevin Bro­gan said.

“The crit­i­cal thing for auc­tions is peo­ple need to be ready to pur­chase at the fall of the ham­mer, so they re­ally need to have their fi­nan­cial af­fairs in or­der,” Mr Bro­gan said.

Across the cap­i­tal cities, 55 per cent of auc­tions cleared, down from 66.7 per cent a year ago.

The vol­ume of auc­tions has also been lower this spring than last, at 1985 across the cap­i­tal cities this week­end com­pared with 2510 a year ago. More homes are lin­ger­ing on the mar­ket for longer, mean­ing buy­ers have more choice.

“When you’ve got clear­ance rates of above 70 per cent, there’s of­ten a feel­ing that if you don’t se­cure the prop­erty that you’re af­ter now, you don’t know when the next one will be along,” Mr Bro­gan said.

“We’re at the point where peo­ple are be­ing fairly care­ful and if the prop­erty they’re look­ing at isn’t quite right … there will be an­other one along some­time soon.”

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