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It's going to be a big weekend for Australia's property market in more ways than one

Photo: Patrick Riviere/Getty Images.

It may be mid-May, a period when activity in Australia’s property market typically slows down, but that’s not the case this year.

Thousands of properties will go under the hammer this weekend, providing the latest litmus test of buyer demand.

And given sentiment towards whether now is a good time to buy fell heavily in the latest Westpac-MI consumer sentiment survey for May, there’s likely to be more eyes on the results than usual.

According to CoreLogic, 2,619 properties will go under the hammer, 210 more than last week and well above the 1,920 in the same week a year ago.

As usual, most are in Sydney and Melbourne, Australia’s largest housing markets.

“Auction activity across Melbourne and Sydney, the two major auction markets, is expected to increase, with 1,222 Melbourne homes to go to auction, rising from last week’s 1,098, and 1,003 auctions scheduled across Sydney, up from last week’s 960,” said CoreLogic.

“Across the smaller markets, volumes will also increase across the remaining capital cities, with the exception of Canberra where volumes are expected remain relatively steady.”

According to the group, a final auction clearance rate of 72.8% was achieved across Australia’s capitals last week, down marginally on the 73% level reported previously.

Sydney and Melbourne continued to outperform other capital cities, logging clearance rates of 74.5% and 75.0% respectively.

Here’s how the other capital fared in the final wash-up.

Source: CoreLogic

With more than 2,600 properties up for sale, significantly above the levels seen a year earlier, it will provide a stern test of buyer appetite at present.

According to the latest Westpac-MI consumer sentiment survey for May, an increasing number of Australians think that it’s no longer the right time to buy a house, with expectations for house prices also taking a hefty hit.

“Confidence in housing was jolted in May,” said Westpac’s chief economist Bill Evans following the release of the report.

“The ‘Time to buy a dwelling’ index fell by 6.5% in May from 96.3 in April to 90.0 in May.

“Apart from one reading in 2010 this is the lowest print for this Index since 2008 when house prices were falling and the Reserve Bank was raising the cash rate.”

Evans said that tighter conditions for bank lending, higher borrowing costs for investors, along with the spectrum of initiatives in the Budget to discourage housing investors, was likely responsible for the sizeable drop.

With expectations for house prices also taking a hit in the survey, falling by 8.7% led by weaker sentiment from respondents in New South Wales, Queensland and Western Australia, it’s likely that the preliminary auction results — released on Sunday — will attract more interest than usual.

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