Weaker clearance rates and longer selling times signal softer market conditions; rental growth continues to decelerate
This year’s spring selling season underperformed compared to last year, with national sales volumes 4% below the historic average, according to CoreLogic’s December Housing Chart Pack.
The report highlighted regional disparities, with Sydney seeing sales volumes drop 15.1% below average, while Adelaide sales were 15.8% higher.
Nationally, total listings rose 10.6% during the season, with even tighter markets experiencing a boost in available stock. Perth, in particular, saw total listings rise 34% over spring, with a 1.2% year-on-year increase in the four weeks to December 1 – marking the first annual increase for the city in 2024.
Clearance rates also declined during spring. Across the combined capital cities, the final weighted clearance rate averaged 57.3% in the four weeks to November 24, down from 62.7% in the season’s first month, signalling weaker market conditions.
“Between higher stock levels and lower-than-usual sales volumes, the data for the end of November shows that buyers were the winners this spring, and sellers generally saw softer market conditions over the past few months,” said CoreLogic economist Kaytlin Ezzy (pictured above).
Properties also took longer to sell during spring, with the median days on market rising to 32 days in the three months to November, compared to 28 days in the preceding three months and 27 days in spring 2023.
“The increase in selling times has coincided with higher stock levels and softer sales volumes year-on-year,” said Ezzy, who also noted the median time on market had increased by four days annually across both the capital cities and regional areas.
Rental growth slows amid affordability constraints
Meanwhile, rental growth continued to decelerate nationally, with rents increasing 5.3% in the 12 months to November – the slowest annual rise since April 2021. Over the three months to October, capital city rents rose marginally by 0.2%, while regional rents saw a stronger 0.9% increase.
Ezzy attributed the slowdown to strained rental affordability, which may be encouraging the formation of more share households or delaying young Australians’ plans to move out of their family homes. RBA reported that, on average, household size has been rising across the capital cities.
Ezzy also pointed to a gradual slowdown in net overseas migration and the completion of backlogged HomeBuilder construction projects as factors easing pressure on the rental market.
Gross rental yields remained at 3.7% nationally in November for the second consecutive year. However, performance varied across markets. Yields fell in high capital growth cities such as Brisbane, Adelaide, and Perth, increased in Canberra, Darwin, Hobart, and Melbourne, and held steady in Sydney.
Looking ahead, Ezzy suggested rental growth may see a modest rebound in the first quarter of 2025 due to seasonal trends but warned the broader rental boom appears to be over.
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