- Preliminary auction clearance rates in Australia rose again last week despite over 3,000 properties going under the hammer
- Current clearance rates are now well above the levels seen late last year
- The rebound suggests annual house price growth may accelerate moderately in the period ahead based off historic patterns
Australian auction clearance rates are now recovering having fallen to fresh multi-year lows late last year.
According to CoreLogic, a preliminary combined capital city clearance rate of 70.5% was achieved last week, up slightly from the 69.1% preliminary figure reported one week earlier.
Despite the continued improvement, clearance rates were below the 78.4% level achieved in the same corresponding week in 2017 when 3,301 auctions were held.
Helping to cement the view that clearance rates have now bottomed in the current cycle, the increase came despite a flood of properties going under the hammer, lifting to 3,275 across the capitals, up substantially from 1,992 auctions in mid-February.
“Results segregated into property type showed that units outperformed with 72.9% of units selling at auction while 69.5% of houses sold,” CoreLogic said.
By individual capital, Adelaide recorded the highest preliminary clearance rate across the country at 75.9%, followed by Sydney and Melbourne where 71.7% of reported auctions resulted in a sale.
“Melbourne returned a preliminary auction clearance rate of 71.7% which was higher than final figures from last week which saw 69.8% of auctions clearing,” CoreLogic said.
“Melbourne’s higher preliminary clearance rate was across a significantly higher volume of auctions week-on-week with 1,610 held, up from last week’s 932 auctions.”
In Sydney, 1,221 homes were taken to auction, up from 737 a week earlier when a final clearance rate of 67.8% was achieved.
Preliminary clearance rates in all other capitals rose week-on-week.
Combined, the strong results from Melbourne and Sydney largely explained the increase in the national preliminary clearance rate reported during the week.
While final figure will almost certainly be revised lower in line with historic patterns, as seen in the chart below from ANZ Bank, where clearance move, annual house price movements tend to follow.
At current levels, clearance rates point to a modest acceleration in annual house price growth in the period ahead, at least based off past relationships.
We’ll get further information in that front later today when CoreLogic releases weekly house price data for Australia’s five mainland state capitals.
Last week, CoreLogic said prices fell across Australian mainland state capitals, led by a 0.2% drop in Sydney.
That saw annual growth in prices across the country slow to just 2.4% on an average weighted basis.
This table from CoreLogic breaks down the auction performance by individual capital city last week on a more granular basis.