Danger, Danger! High Volumes or Something Else?
December 2021 saw a new record set
December 2021 saw a new record set for the number of Auctions held on a Saturday not once, not twice but on three consecutive Saturdays.
Basically, from the last Saturday in November to the second week of December, if you weren’t holding an auction, you knew someone who was.
Okay, that’s all very interesting, but what about prices? Well, it led to the pace of prices slowing for a third consecutive month, but price growth remained positive in all capital cities, except for Melbourne, which was down 0.1%.
So, what does this all mean? We have some thoughts, but they’re only that. In fact, they’re not even thoughts, just questions, really. Like:
Were prices and clearance rates a function of that old economics classic ‘Demand and Supply’?
To have not just one, but three of the highest auction volumes between the end of November and December ever recorded, maybe supply outstripped demand?
Were there less people going to opens and auctions?
From the agents we spoke to towards the end of the year, all of them mentioned a drop in foot traffic. Does this mean less people were looking to buy homes? Probably not, because the feedback seems to be people were doing things they haven’t been able to for almost two years. Like go away for the weekend, catch up with friends for breakfast dinner and lunch, take the kids somewhere that wasn’t the local park and go overseas.
Are auctions out of favour?
We wonder that. Maybe, people want to take a bit more time. Maybe they want to ask more questions and feel like they’re not in such a rush to find that new perfect home. Could this mean private sales are about to have their day in the sun in 2022?
What will happen with rates?
Ah, that old chestnut. We’re probably silly in believing what the RBA says about not raising rates till 2023. That might not stop the banks, but we’re not sure rates that going up is as guaranteed as some others do. This thought is definitely the one we’re least sure of. But hey, we waited till now in the blog to say something people could easily point out we got wrong in 12 months’ time.
So, there you have it, a bit of a look back and a bit of a look forward to the residential market in 2022.
Missed our last market blog that included the predictions for prices of the Big Four banks? Check it out here> Next news article