- Australian preliminary auction clearance rates continued to slide last week, led on this occasion by Melbourne.
- Sydney’s clearance rate rebounded, albeit a large number of results are yet to be reported.
- CoreLogic will release updated price and listings data later today.
Australian auction clearance rates continued to slide last week, according to new data released by CoreLogic.
A preliminary clearance rate of 59.7% was recorded across Australia’s capital cities, down from the 60.3% preliminary reading reported one week earlier.
The small decline coincided with an increase in properties going under the hammer, lifting from 2,100 to 2,287.
Of those auctions held, CoreLogic only received results from 1,772. Within that figure, 1,058 cleared while 714 failed to sell.
The large number of unreported results, some 515, suggests that final clearance rates for the week — released on Thursday — will be revised down towards, or perhaps below, the final reading of 56.8% seen in the prior week.
Final clearance rates tend to be revised lower as late, often unsuccessful results, are reported to the group.
As has been the case for several months, clearance rates for units continued to outperform those for houses, coming in at 64.9% and 57.6% respectively over the week.
By individual capital, a sharp drop in Melbourne, Australia’s busiest auction market, drove the national decline last week.
According to CoreLogic, a preliminary clearance rate of 60.9% was recorded across 1,132 auctions held, falling from a preliminary reading of 64.2% in the prior week when 1,033 properties went under the hammer.
“It is likely Melbourne’s final clearance rate this week will weaken further and fall below 60% as results are collected,” CoreLogic said.
In the prior week, Melbourne recorded a final clearance rate of 62%.
In contrast to the renewed weakness reported in Melbourne, Sydney’s preliminary figure rebounded after falling to a fresh multi-month low in the prior week.
A reading of 62.7% was recorded, an improvement on the 60.8% preliminary estimate reported in the prior week.
However, CoreLogic received results from just 576 of the 808 auctions held, pointing to the likelihood that the final reading may be substantially lower when released later in the week.
In the prior week, Sydney’s final clearance rate stood at just 54%.
Across the smaller capitals, preliminary clearance rates improved in Adelaide and Perth but fell in Brisbane and Canberra.
Given the reasonable relationship that exists between auction clearance rates and home prices, the persistent slide in the percentage of properties selling at auction points to the likelihood of further price weakness ahead.
Many analysts, including those from the Commonwealth Bank, Deutsche Bank, HSBC, UBS and Morgan Stanley, are predicting that home prices will continue to weaken in the period ahead, led by declines in Sydney and Melbourne, Australia’s largest and most expensive markets where much of the recent price has been concentrated.
Markets will receive updated data on that front later today with CoreLogic set to release weekly, quarterly and annual price movements from Australia’s five mainland state capitals, Sydney, Melbourne, Brisbane, Adelaide and Perth.
That will be followed by the release of the group’s more comprehensive Home Value Index — covering price movements in all capitals and regional areas during May — on Friday.
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