The data is in after major tax reforms were announced …
The residential property market showed some early signs of cooling in the first weekend after the federal budget, with auction clearance rates falling quite sharply across the country.
Nationally, clearance rates were down around 11 per cent week-on-week, although interestingly, results were still tracking higher than the same time last year.
Fresh data from property research group Cotality points to a mixed weekend across the capitals, with Sydney standing out as the weakest performer.
Sydney
Sydney saw the biggest shift. Its preliminary clearance rate dropped to 49.2 per cent — down 6 per cent on the previous week — marking its softest result since the heavily disrupted COVID period back in April 2020. Auction activity also eased, with 616 homes taken to market, about 14.9 per cent fewer than the week before.
Melbourne
Melbourne also saw fewer homes go under the hammer, with 906 auctions recorded, down 14.9 per cent week-on-week and slipping below the 1,000 mark. Even so, the preliminary clearance rate actually lifted slightly to 61.4 per cent. While that sounds positive, it still sits among the weaker results so far this year, suggesting the market has cooled a touch overall.
Brisbane
Brisbane told a steadier story.
Just over half of all auctions were successful, with a clearance rate of 55.7 per cent, up from 53.7 per cent the week prior. That also made it the strongest Brisbane result in about a month, hinting at more consistent buyer demand there.
Adelaide
Adelaide had a particularly strong weekend.
Auction volumes jumped 41 per cent, and 75.7 per cent of homes sold — the best result since mid-March. It was one of the clearer bright spots in the latest data.
Perth
Perth, meanwhile, saw its busiest auction week since late last year, with 25 homes going under the hammer. But results were softer on the success side, with a clearance rate of 38.9 per cent, showing a more uneven market compared to other capitals.
The federal budget impact
Overall, it feels like the budget week has taken a bit of steam out of sentiment at the auction level, but the picture is far from uniform — with some cities clearly holding up better than others.
With tax reforms making residential property less appealing to investors, experts are predicting we will experience what’s called a ‘sector shuffle’. This is where capital is pulled from one weak sector and into another which is performing well.
Commercial appeal
While we are seeing some areas in the residential market take a post-budget hit, investors are already looking sideways at commercial real estate opportunities.
Unlike residential property, industrial, office, retail and other commercial properties can still be negatively geared into the future.
Those investors pondering what property investments will significantly benefit from the budget, commercial property is at the top of the list.
Shuffle, shuffle.
