48% auctions fail, but streets still win

48% of auctions are failing right now — but that headline still hides what’s happening street by street. - Capital city sales are down 16.2% on a year ago and 14.5% below the five-year average - Advertised stock is up almost 11%: more homes, fewer buyers - Annual rent growth has accelerated to 5.9%, with national vacancy at 1.6% - Cotality’s study across 3,000 suburbs found owner-occupier dominated units grew 99% vs 65% in investor-heavy suburbs Today’s takeaway: clearance rates matter, but ownership mix matters more. If you want the real story behind a suburb, you need data at the street level. Download the free framework here: https://ripe.house/brief-ownermix Disclaimer: This content is general in nature and not personal financial advice.

48 percent, nine weeks in a row under 50, a worse run than the pandemic, half the homes going under the hammer right now are not selling. And if you own property, here is the uncomfortable question. Is that your suburb or is that the average hiding your suburb? Because today I've got the study that says the answer is decided by who lives on your street. Let's go. Start with why clearance rates collapsed. Capital City sales over the three months to June are down 16.2 percent on a year ago and 14.5 percent below the five-year average. Meanwhile, advertised stock is up almost 11 percent. More homes, fewer buyers. That is not a crash. That is a pricing mismatch. And Cotality's Tim Lawless says exactly that. Buyers now have more choice and less urgency. Now the other side of the same market. While values fell, rents went the other way. Again, annual rent growth accelerated to 5.9 percent in the June quarter, up from 5.7 and up from a cyclical low of 3.4 in the middle of last year. National vacancy is 1.6 percent and every single capital city is under 2 percent. Over five years, rents are up 40.6 percent, $204 a week. The five years before that, $55. And the week turns on one release. Wednesday, 11.30 June, inflation from the ABS. May's headline was 4 percent, but the trimmed mean, the core number the Reserve Bank actually watches, was 3.6 and it went up, not down. The single biggest contributor to that number, housing, at 6.5 percent. Rents inside the CPI are running at 3.6. Inflation and your rent roll are now the same conversation. So here is the research that should change how you pick a suburb. Cotality took 3,000 suburbs and 16 years of value data, January 2010 to March 2026, and split them by one variable. What share of homes are lived in by their owner? Units in owner-occupier dominated suburbs grew 99 percent. Units in investor-heavy suburbs in the same cities over the same 16 years grew 65. 34 percentage points on the same clock in the same market. Look at the shape of it. Units, 99 versus 65. Houses, 136 versus 117. So ownership mix matters for houses, 19 points, but it matters nearly twice as much for units. And that tells you the mechanism. You can flood a suburb with units, you cannot flood it with houses. Investor-heavy unit markets are the ones exposed to a sudden supply spike, and Cotality's economist says precisely that. Put it in dollars, because percentages are easy to shrug off. Applied to the January 2010 median unit value of $436,000, that 34 point gap is $148,000 of gross capital gain you either got or didn't. For houses on a $435,000 median, it's $83,000, same money in. 16 years later, $148,000 apart, and the mechanism is not mysterious. Owner-occupiers buy for livability, they put their own money into the place, and they hold it for years. Investors are more exposed to three things at once, supply spikes, sentiment shifts, and credit conditions. And when credit tightens, a lot of them hit the market in the same quarter. That's not a moral judgment about investors. I am one. It's a statement about correlation. A street full of investors is a street where the sellers all move together. Now, add the clock. Investors were 40% of housing lending by value in the March quarter. Investor mortgage rates are in the mid-sixes, while capital city yields average three and a half. So the cash flow is already underwater before anything changes. And from the 1st of July, 2027, negative gearing is grandfathered for existing propertie