Here comes the boom, but not that one. The opposite one – it’s going to be the busiest auction week of the year across Australia – and the fifth busiest on record.

And that’s a sign we’re done with the property boom.

Predicted auction volumes surged 27% over the week, just the fifth time CoreLogic’s capital city auction volumes have topped 4,000.

It’s not a super shock – with the Reserve Bank of Australia (RBA) now widely tipped to get bumping on the cash rate in June – there are suddenly some 4,086 homes going under the hammer across capital cities nationwide — a 27.3% spike as vendors try to squeeze into the top of the market.

More significantly, it may very well be the last flourish of the greatest Australian property cycle since property and cycles came to Australia.

With the interest rate cycle similarly due for a reboot, the only questions for economists and property fans alike is how soon they’ll rise and how fast.

Shane Oliver of AMP Capital says the central bank may choose to go with a more shirt-fronting approach to tightening monetary policy, and a rate rise of 0.4% in June is entirely possible.

Priced in

This is how ANZ sees the cash rate playing out this year.

byron property

AMP expects the cash rate to be standing at a full percent by Christmas, and Dr Oliver is warning Aussie house prices could fall more quickly in response.

For many that cycle can’t begin soon enough

Melbourne is where there’ll be some 1,768 auctions this week, up almost 18% from the 1,501 auctions held last week. This week is expected to overtake the week ending 27 March (1,626) as Melbourne’s busiest week of the year to date. Compared to this time last year (1,059), this week’s auction volumes are up 66.9%.

In the city that invented modern Australia, Sydney, 1,554 homes are scheduled for auction this week, up 36.8% from the 1,136 of last week.

It’ll be Sydney’s fourth busiest week on record, just 237 auctions shy of the record volumes recorded in mid-December 2021. This time last year 821 auctions were held across Sydney.

CoreLogic’s head of research Eliza Owen told Stockhead, the auction market right now is largely corroborating what we’re seeing in prices, which is a bit of a slowdown.

“We usually see a big ramp up in auction activity leading up to Easter Sunday, because vendors are making up for the lost time.

“But what’s interesting is that the surge in auction volumes takes us to the fifth ever busiest auction week on record. There could be a few reasons for this. For one, the spread of omicron may have kept sales and listings activity down as people were out with COVID, and now that’s being made up for.”

Eliza concedes the potentially more significant reason for such high auction volumes is the shift in the market – vendors having a right solid crack at trying to sell before the cash rate increases and markets start softening more substantially.

Substantial is the operative word. AMP Capital expects a house price correction of between 10-15%

In your face, vendors

“Ironically,” Eliza says, “it’s that same lift in auction volumes that might end up giving buyers more choice, more time, and more power to negotiate, because there’s more available stock on the market.”

“After the Easter break – I know you don’t have those at Stockhead – I  think we’ll see auction volumes cooling somewhat, but it’s still a bit early to tell exactly where it’s going,” she adds.

“Sydney property values pretty much flat-lined through March, and we’ve also seen the clearance rate across Sydney decline each week for the past 6 weeks ending 3rd of April.

byron property
Via CoreLogic

In Melbourne, there was a similarly small 0.1% fall in property values through March, and the clearance rate has averaged 67% in the past four weeks, down from 78% in the same period of last year. So the high-frequency results we get from the auction market are a good indicator of how the market is trending.

Predicted auction volumes have surged 27% over the week, to 4,086 across the capital cities.

According to the latest Demographia International Housing Affordability Survey, Sydney is now the second worst place on earth to cough up for a home – second only to Hong Kong as the least affordable city in the world.

If that’s not bad enough, further humiliation attends – because Sydney is not even the fastest growing market in Australia.

That’s dishonour goes to Byron Bay, where prices are up 212% over the last 20 years – but that’s misleading, because most of that growth has come in since around the time Thor started taking selfies there of Mrs Thor and the Thorettes (I’m sorry but it’s true).

Via Elsa Thor’s Pinterest

According to Domain, Byron Shire’s median house price literally exploded last year, smashing Sydney prices like an ice giant under Moljinr. Byron prices went Odinwards, up 47.8% to $1.7 million.

Five years ago – when we hit peak Thor with the release of the critically acclaimed Thor: Ragnorak – an average place was a tad under $800k. So, looking around the newsroom – yes, we’re confirming prices have but doubled since then with Domain’s number – a 111.2% increase.

The Thors et al, via Pinterest

Meanwhile, back on the farm…

And just when you Thor’t it was probably safe to go back to the country…rural real estate firm Elders says demand for farmland has driven national prices up to record highs, gaining around 20% last year and the year before.

Elders says the value of rural property traded nationally last year totalled $13.3 billion, a rise of $1.7 billion from 2020.

The latest Elders Rural Property Update shows prices per hectare jumped again in the last quarter of 2021, with the national median price per hectare lifting 3.6%.

Via Elders

Year on year the price of farmland jumped 18.4%,

The national median price of farmland is now $7635 per hectare or $3091 an acre.

Elders collated prices for every rural property sale above 40ha in partnership with Corelogic – aside from Tasmania where properties above 30ha were also include.

Tom Russo Elders executive general manager of real estate  said last year proved even greater confidence in agriculture due to a perfect combo of fab seasonal conditions, top commodity prices and record low interest rates.

“There remains a seemingly insatiable appetite for Australian farmland from both local players and large institutional investors,” Mr Russo said.

Elders is warning that the available farmland is likely to get choked off even further heading through 2022 with volumes falling sharply since midway through 2021.

Country road, take me outta here

Elders says the reasons people – heaps of them predatory neighbours apparently –  are willing to cough up record prices are the same reasons most farmers are hanging onto their land, creating another perfect storm where demand is dancing on the grave of supply.

“Perhaps the most important long-term factor driving property prices is a belief in the continuation of strong market fundamentals for most Australian farmland outputs,” Elders said.

“Demand is strong for Australian grains, oilseeds, meat, dairy and fibre products, with experts, family farmers and investors believing this is likely to continue for some time.”