- Less than half of Sydney and Melbourne homes taken to auction last week sold.
- Clearance rates of below 50% have typically corresponded with further falls in home prices in the past.
- Auction volumes will fall sharply this week as national attention turns from the housing market to Flemington.
Sydney and Melbourne home prices fell by 0.7% in October, extending the decline over the past year to 7.4% and 4.7% respectively.
Given the current level of auction clearance rates in both cities, history suggests those declines will continue to extend for some time yet.
They continued to languish below 50% last week, remaining at levels that typically have seen prices fall in the past.
Melbourne recorded a final clearance rate of 48.6%, a small improvement on the level reported seven days earlier. Sydney’s clearance rate also inched higher, lifting to 45.3% from 44.6% a week earlier.
The modest improvement in both cities came despite more properties going under the hammer, especially in Melbourne.
Of the smaller capitals, Adelaide recorded the highest clearance rate nationwide at 57.6%.
Despite the modest improvement recorded in Sydney and Melbourne last week, it was not enough to prevent the four-week moving average in national clearance rates falling to the lowest level since 2012.
Turning to the week ahead, auction volumes will fall sharply as attention across the nation moves from the property market to the race track, albeit temporarily.
“Across Melbourne, the number of auctions to be held is expected to fall this week with only 234 Melbourne homes scheduled to go to auction,” CoreLogic says.
“The lower volumes is likely due to the upcoming Melbourne Cup festivities and coming off the back of the second busiest week for auctions this year.”
Volumes will also fall in Sydney with 764 being tracked by CoreLogic, down from 798 a week earlier.
Across the smaller capitals, activity in Adelaide and Brisbane will much the same while Canberra, Perth and Tasmania will all see volume lift.