Markets live updates: ASX to jump as Wall St investors retreat from tech, Australian dollar slides
Australia's housing market is experiencing its weakest auction clearance rates since 2011, with prices down 4-5% from their peak, according to JP Morgan analyst Tom Kennedy. He attributes this to past RBA rate hikes and potential federal government changes to negative gearing and capital gains tax, though he suggests further price adjustments may be less significant.
Why it matters
This analysis provides critical insights into the health of the Australian housing market, impacting homeowners, potential buyers, investors, and the broader Australian economy.
Auction clearance rates face 'weakest run since 2011' N By Nassim Khadem
Tom Kennedy from JP Morgan notes that Australia's national housing auction clearance rates have now averaged below 50 per cent since June, the weakest run since 2011.
"Auction clearance rates and annual house price growth are correlated through time, with the former a seemingly reliable leading indicator," he writes.
So far, Cotality's median price metric is 4 per cent below its peak, while hedonic prices, which take into account dwelling-specific characteristics, are down closer to 5 per cent, he said.
"Taking this relationship at face value implies the remaining price adjustment will be less significant from here, in our view, culminating in a peak to trough decline in the mid/high single digits, " he said.
He said there are two main uncertainties around this view.
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