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Cautious buyers reshape Qld auction market
Auction clearance rates took a sharp hit this week, with more homes passing in as buyer confidence buckles under rising rates and global uncertainty.
According to REA data for the week ending 29 March, Queensland saw 472 auctions scheduled homes scheduled for auction over the weekend, with a clearance rate of just 44 per cent.
Meanwhile, NSW observed a clearance rate of 47 percent, 29 percent in Western Australia and 50 percent in the ACT.
Streamline Property Buyers founder, Melinda Jennison, said the softer clearance rate reflected a more cautious buyer mindset, with a combination of factors making people more conservative.
“Buyers are reacting to negative headlines around international uncertainty, higher living costs linked to oil price pressures, rising interest rates, and proposed policy changes for property investors around negative gearing and capital gains tax,” she told SPI.
She said that, from what her team observed over the weekend, several properties that passed in at auctions still had multiple registered bidders, but the issue was that bidding often did not meet sellers’ expectations.
“That points to a widening gap between buyers and sellers, rather than a lack of interest altogether,” she said.
Jennison noted that in Queensland, private treaty was the dominant method of sale, meaning a property that passed in at auction can still go on to sell, sometimes at a higher price.
When it came to supply and demand, Jennison said that despite the low clearance rates, listing volumes remained close to historic lows across much of Queensland and Brisbane.
She said the market continued to deal with a structural undersupply that had persisted since the COVID-19 pandemic, and as a result, demand still remained solid for quality properties.
“Unlike Brisbane, Sydney, and Melbourne are seeing listing volumes that are more in line with long-term averages,” she said.
Jennison said investors were particularly active in the market, accounting for more than 40 per cent of financial commitments around the state.
She also said first home buyer incentives introduced in October last year had driven strong demand in the sub-$1 million price bracket, having a clear impact on values, particularly in the attached dwelling market.
“Unit values in Brisbane have been rising faster than house values, and quarterly growth across the city has hovered around four to five per cent, significantly outpacing Sydney and Melbourne, where conditions are near flat or slightly negative,” she said.
Jennison said she expected buyers to remain cautious through the Easter period and into the rest of autumn as consumer confidence remained under pressure.
However, she said demand was still likely to keep sufficient upward pressure on prices, particularly for quality homes and investment-grade properties.
“In Brisbane especially, tight supply should continue to underpin values even if buyer demand becomes a little more measured,” Jennison concluded.