Finance the stumbling block for home sales
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.”