- Australian auction clearance fell again last week, driven by a sharp decline in Sydney.
- Across the capitals, a clearance rate of 52.4% was recorded. Clearance rates have fallen for six consecutive weeks and sit at the lowest level since 2012.
- The ongoing slide in clearance rates points to the likelihood of further weakness in home prices, especially in Sydney and Melbourne.
Australian auction clearance fell again last week, driven by a sharp decline in Sydney.
According to final figures from CoreLogic, a combined capital city clearance rate of 52.4% was recorded last week, the sixth week in succession that it has fallen.
Contributing to the slide, auction volumes rose sharply, lifting to 2,002 from 904 a week earlier.
As seen in the chart below, the decline in clearance rates has accelerated quite sharply after a small uptick earlier in the year, leaving it sitting at lows now seen since 2012.
Only a year ago, the combined capitals clearance rate stood at 66.7%.
Tighter lending standards, along with countless forecasts for further price declines in Sydney and Melbourne, remain the key factors behind the ongoing slide.
Explaining the soft result, less than half of all Sydney properties that went to auction sold during the week.
“Across Sydney, 708 homes were taken to auction last week with just over half failing to sell,” CoreLogic said.
“A final clearance rate of 49.4% was recorded, falling from the 56% over the previous week when fewer auctions were held.”
In contrast, Melbourne’s clearance rate edged a little higher, although it still remained entrenched below 60%.
“Both the final clearance rate and volumes increased last week with 992 homes taken to auction, returning a 56.2% success rate,” CoreLogic said.
In the prior week, Melbourne recorded 54.9% clearance rate from 275 auctions held.
Aside from Perth, clearance rates fell in all remaining capitals last week.
Given the relationship that clearance rates have to annual price movements in the past, the ongoing decline in the national figure points to the likelihood of further weakness in prices, particularly in Sydney and Melbourne.
In the week ahead, auction volumes look set to decline, fitting with the usual seasonal pattern seen during winter.
CoreLogic is tracking 1,736 auctions across the capitals. 879 look set to take place in Melbourne while 612 are scheduled in Sydney.
Volumes will also fall in all other capital city markets aside from Hobart.
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