Australian residential activity picks up in key spring season

[SYDNEY] Australia’s residential real estate activity picked up as the key spring property season finished a second week, although volumes remain subdued amid a housing downturn. 

Almost 1,600 homes across capital cities were taken to auction last weekend, according to data from property researcher Cotality. While that was an increase from a week ago, volumes were about 34 per cent lower than the same time last year, the data showed. 

“The spring pattern of more stock coming to market is taking shape, albeit at lower levels than a year ago,” Tim Lawless, research director at Cotality, said. Activity is set to pick up this week, with more than 1,900 homes scheduled for auction, before easing towards the end of September, he said. 

The latest results are a further sign of weakening in the nation’s once-hot housing market following government property tax changes in May and three Reserve Bank of Australia (RBA) interest rate increases. A gauge of house prices slid for five straight months through August, taking the drop from its March peak to 3.6 per cent, according to Cotality. 

While the weekend’s auction clearance rates rose to 58.5 per cent, the highest in 19 weeks, they remained well below levels seen a year ago at which time almost three in four homes at auction were sold, Lawless said. 

“The lower number of auctions held relative to a year ago reflects fewer new listings coming to market, but also that a larger portion of vendors are opting to sell their home by private treaty rather than auction while clearance rates remain low,” he added. BLOOMBERG