As buyers and sellers "collectively closed" on the long weekend, the Australian residential auction market fell, and the national liquidation rate fell to its lowest since the year, interrupting the pace of the recent recovery in the housing market.
The number of auctions arranged last week fell sharply, more than half of the previous week, and most states suspended activities due to the King's long birthday weekend.
Although listings decreased, the national preliminary clearance rate also fell to 63.8%, setting a low level since this year (excluding January volatility data), and the data was provided by Cotality (formerly CoreLogic).
In the previous two weeks, the national preliminary clearance rate remained above 70%.
SQM Research founder Louis Christopher said that the activity of buying and selling during the holidays is usually low, but he expects the market to rebound this week and regain the positive momentum previously driven by interest rate cuts.
"We are likely to return to the active level we were two or three weeks ago," Christopher told the Australian Financial Review.
"There are more and more voices in the market talking about another rate cut in July, and we also think that the RBA will cut interest rates in July. So I expect the liquidation rate to strengthen further from now on."
The weak GDP data released last week strengthened the market's expectations for another rate cut at the Reserve Bank of China's meeting on July 7-8. If it comes true, this will be the third rate cut this year. The financial market believes that the RBA's probability of reducing the cash rate from 3.85% to 3.6% is as high as 91%.
The previous two rate cuts have ended a short-term and moderate housing market correction, with housing prices continuing to rebound moderately since February, and buyer confidence has improved significantly.
The Sydney market suffered the most significant setback under the impact of the holidays, with the preliminary liquidation rate falling from 69.9% in the previous week to 59.9%.
"Excluding January volatility, this is Sydney's lowest preliminary clearance rate so far this year," said Tim Lawless, research director at Cotality.
"This breaks the trend of the auction market continuing to heat up. Now it depends on whether the liquidation rate will be revised up as data is further collected, or whether the market will recover quickly after the long weekend."
Although the overall slowdown in the market, Sydney still has outstanding transactions.
In Eastwood, a four-bedroom single-family house located on a 999-square-meter corner, sold for $4.01 million in 2 Wingate Avenue live auction, attracting four bidders to compete fiercely.
"The original market expectation was $2.5 million to $3 million, which was probably the most exciting auction I have ever hosted," said Tian Hong, an intermediary at Ray White Epping.
"When the bid reached 4 million, the audience burst into applause and there were many onlookers from neighbors. This is one of the best plots in Eastwood, and the seller was extremely happy and the buyer was very satisfied. The plot has development potential."
The seller has then purchased a new piece of land and intends to build a new house.
Meanwhile, the Melbourne market continued to perform steadily, with an initial clearance rate of 71.5%, the city's sixth consecutive week of maintaining above 70%, but also hit its lowest initial level since the last week of April.
In smaller markets, Adelaide ranked first with an initial clearance rate of 60.3%, followed by Brisbane (58.3%, with a large number of listings). Canberra recorded 54.5%.
