Australia’s combined capital city auction clearance rate fell to a three-year low the final quarter of 2015, dropping to 62.1% from 73.4% according to the latest CoreLogic RP Data Quarterly Auction Market Report.
Suggesting that increased supply contributed to the steep decline, Corelogic RP Data’s head of research Tim Lawless notes that the number of auctions held nationally rose strongly during the quarter.
“In the face of a weaker result for clearance rates, auction volumes actually rose over the quarter with 33,604 auctions held; 15% higher when compared to the September quarter. In comparison to the same quarter in 2014, both auction volumes (34,016) and the weighted average clearance rate (66.2%) were lower this year relative to the December 2014 quarter.”
Offering further evidence that the once-hot Sydney and Melbourne property markets may be coming off the boil, all of the weakness was concentrated in these centres.
“Despite the lower capital cities clearance rate, on a city-by-city basis, Adelaide, Brisbane, Canberra and Melbourne all recorded a higher clearance rate in the December 2015 quarter, relative to the same period one year ago, albeit only slightly in some cities,” notes Lawless.
“The final results for the year further indicate that much of the overall weakness across the auction market can be attributed to the weakening performance across Sydney’s auction market where the clearance rate averaged 59.8% over the quarter compared with a more resilient result of 67.8% in Melbourne.”
Given price gains in Sydney and Melbourne far outpaced those in other cities over the past four years, this suggests that affordability constraints, along with recent curbs on lending to housing investors, is hindering demand for property in Australia’s largest cities.
At a time when residential housing approvals are sitting at all time highs – particularly for high density units – it’s little wonder that many are forecasting slower house price growth, or none at all, in 2016.
This nifty infographic from Corelogic RP Data reveals the auction statistics across Australia’s states and territories during the quarter.