Housing market tumbles; US-Iran peace deal teeters; fuel excise cut extended
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What is the main topic discussed in this episode?
Welcome to Fear and Greed, business news you can use. Today, auction clearance rates fall to their lowest level since the early days of COVID as higher interest rates and budget changes kick in. The ceasefire between the US and Iran teeters on the brink and BHP gets sold off on cost overruns as CSL finds a bunch of friendly investors. Plus, the federal government extends the fuel excise discount and UK Prime Minister Keir Starmer set to lose his job. It is Monday the 22nd of June 2026. I'm Michael Thompson, and good morning, Sean Aylmer. Good morning, Michael. Plenty coming up today, Sean.
What are the current challenges in the housing market?
The main story this morning, the national auction clearance rate has hit its lowest level in more than six years, with preliminary figures showing that just 47% of homes were sold over the past week. And that's just the preliminary figure, not... Only was the clearance rate weak, but nearly one quarter of homes due to go under the hammer were withdrawn, which is another sure sign, right, of weakness in the market. And on top of that, nearly half of homes being sold are going basically before they go to auction, right, in the days beforehand, suggesting that sellers don't actually want to be in that circumstance of being at an auction and their house either being passed in or going for a price that they don't want.
They don't want to test the market.
Right.
That's exactly right. With three interest rates so far this year, a rate rises so far this year. And Reserve Bank Governor Michelle Bullock last week saying the rate hiking cycle might not be over. Alongside those changes in the federal budget, making investment property less attractive, well, buyers are staying away. The major banks, notably National Australia Bank CEO Andrew Irvine, have already commented on the slowdown in mortgage lending, a critical and very profitable part of any bank's business. Michelle Bullock last week mentioned interest rates were having the desired effect on the housing market, but I really wonder if the central bank thought that things could slow as quickly as this.
It's a very big week in the world of economics. I'm sure I know you're talking to Stephen Kikoulis after the show about this. We've got May inflation figures on Wednesday. We've got labour force figures on Thursday. We've got household spending data Wednesday. We're going to find out a lot more about how the economy is travelling, but certainly the housing market ain't travelling real well.
No, it's not painting a very pretty picture at the moment. And the fall in this preliminary clearance rate below 50% is, correct me if I'm wrong, this is the first time that that's happened since the early days of the COVID pandemic, right? And given that real estate agents tend to like giving the good news first, the final clearance rate in recent weeks has been about, five and a half percentage points lower than the preliminary rate, according to Cotality. That means really that the final rate this week might not be much above 40%, which is really quite alarming. Taking us around the country, what cities, which ones are doing worst?
Okay, so no city is doing very well in relative terms. I suppose you could say Melbourne's holding up best, but it went from 58% a week ago to 51%. So its final rate will definitely be under that mark. It's the worst result, the preliminary clearance rate, the worst result since September 2021. That was during Melbourne's sixth COVID lockdown. Remember all those? Melbourne, man, it had a lot of COVID lockdowns. Oh, yeah. Sydney's preliminary clearance rate, 47.4%. Even though a bunch of people withdrew their homes from sales, he would think that that might help it. But it's the lowest since April 2020. Brisbane is the country's third largest city. Only one third of auctions were successful over the weekend.
Two thirds failed. Adelaide, being the strongest market in terms of clearance rates for a few years now, according to the Cotality data, its clearance rate over the past week was just 40%, the lowest since May 2020.
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