Australia’s housing market is showing clearer signs of slowing as higher interest rates weigh on buyers and more properties come onto the market.
National residential listings reached around 301,200 in October, up 19.3% from a year earlier.
At the same time, auction clearance rates have weakened sharply, falling to around 45.6% compared with 67.7% a year ago.
The deterioration comes as the Reserve Bank’s latest rate hike pushes the cash rate to 4.85%, increasing mortgage costs for both existing borrowers and prospective buyers.
Higher repayments are reducing borrowing capacity and making it more difficult for buyers to meet vendors’ price expectations.
The rise in listings also gives buyers more choice, reducing some of the urgency that characterised stronger periods of the housing cycle.
Arrears are beginning to rise as well, although they remain relatively low by historical standards.
The next test will be whether conditions weaken further as banks pass through the latest RBA increase.
A sustained rise in listings combined with softer clearance rates could place additional pressure on prices, particularly in markets where affordability is already stretched.
