Australia's spring property market has failed to gain its usual momentum, with Cotality's October Housing Chart Pack showing an estimated 39,747 homes sold nationally in September, down 20.9% on the same month last year.
The median time to sell stretched to 41 days from 26, while capital city vendors accepted their largest discounts in five years.
Listings are building faster than buyers are committing
New listings were 7.9% lower than a year ago and almost 12% below the five-year average, yet total advertised stock rose 19.1% to 145,573 properties.
Homes are accumulating on the market faster than they are being purchased.
Cotality research director Tim Lawless, said the slowdown goes beyond seasonal disruption.
"The bigger issue is that buyers are finding it harder to commit," Lawless said.
"Higher interest rates have reduced borrowing capacity, household budgets are under pressure and confidence is weak."
Last month's rate rise, the fourth this year, has cut the borrowing capacity of a median-income household by an estimated $90,000, or 9%, since February.
Auction results reflect the same hesitancy, with the four-week average clearance rate at 48.3%, down from 64.4% in late February.
Capital cities slide as regional markets hold firm
Lawless said this gap is due to affordability.
"Property values are typically lower across regional Australia, which gives buyers more options within their budgets," Lawless said.
Outlook depends on rates
Rental growth has eased, with national rents up 0.5% over the quarter and 5.5% annually, and gross rental yields reaching 3.85%, their highest since August 2019.
Looking ahead, the result will depend on upcoming inflation data and the RBA's November decision.
"Until households have more certainty about interest rates and their financial position, it's difficult to see a sustained recovery in buyer demand," Lawless said.
