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Aussie property market takes drastic turn

9News.com.au logo 9News.com.au 12/11/2018 Rosemarie Lentini

a group of people standing in front of a crowd: An auction for the sale of a four-bedroom family residence in the Sydney suburb of Strathfield. © CoreLogic An auction for the sale of a four-bedroom family residence in the Sydney suburb of Strathfield. Prospective home buyers are deserting property sales across Australia as an increasingly tight lending environment makes it tough to get a loan.

New figures reveal more than half the homes that went under the hammer last week failed to sell.

Research group CoreLogic reported a preliminary clearance rate of 46.8 per cent for the week, with 2384 auctions held across the country’s capital cities. 

It is the seventh consecutive week in which the weighted clearance rate came in under 50 per cent. 

a close up of a map: CoreLogic reported a preliminary clearance rate of 46.8 per cent for the week, with 2384 auctions held across the country’s capital cities. © AAP CoreLogic reported a preliminary clearance rate of 46.8 per cent for the week, with 2384 auctions held across the country’s capital cities. But CoreLogic real estate head Geoff White expects the rate to drop again to the low 40s, where it will hover for the rest of the year.

“The banks’ lending process requirements have restricted buyers and in some cases they simply can’t raise the funds to purchase a home. This is the issue the buying community is facing,” he tells nine.com.au.

“This has been a gradual shift in the market not unlike other major downturns we have experienced over the last 20 years. We won’t see a crash, notwithstanding a lot a will change when the final report into the financial services royal commission is handed down in February. That will potentially allow banks to have more confidence in lending requirements.”

In Sydney, 48.4 per cent of homes sold at auction in the last week, while in Melbourne, a preliminary clearance rate of 48.3 per cent was recorded. 

These low readings contributed to the weak national figure, according to CoreLogic. 

“The weakening weighted result is largely attributed to softening conditions across the two largest auction markets of Melbourne and Sydney (which) have accounted for 83 per cent of all auctions held so far this year,” it said in its report.

Australian Bureau of Statistics data shows demand for home loans has been steadily declining. Over September, nearly four per cent fewer loans were issued.

Despite this, CoreLogic’s Mr White said now is a good time to buy. 

"It is very much a buyer’s market and buyers should consider purchasing now if they find a property that ticks all the boxes,” he said. “They will not be paying 2017 prices after the market has adjusted this year."

On Saturday, droves of hopeful home buyers hit auctions around Australia, keen to snap up a good deal. 

In Collaroy, in Sydney's north, a four-bedroom, two-bathroom beach cottage sold for $2.8 million at auction. 

Up in Brisbane, a four-bedroom home in a quiet cul-de-sac in Indooroopilly was clinched for $1.8 million.

Meanwhile in Melbourne, a two-bedroom uni in Abbotsford, near the Yarra River, went for $528,000.

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