Sydney auction clearance rates just hit the lowest level seen in months

Mark Tipple / Barcroft Media / Getty Images
  • Australian auction clearance rates continued to soften last week, driven down by renewed weakness in Sydney.
  • A larger number of properties went under the hammer across all capital city markets.
  • CoreLogic will release data on price movements in two separate reports in the coming days.

Australian auction clearance rates continued to soften last week, driven down by renewed weakness in Sydney.

According to CoreLogic, a preliminary combined capital city clearance rate of 62.5% was reported, down from last weeks preliminary reading of 63.3%.

The group said that 64.4% of units sold, once again topping the clearance rate for houses at 61.6%.

The small decline coincided with a sharp lift in the number of properties being taken to auction, lifting to 2,539 from 1,799 one week earlier.

Of the 2,539 auctions held, CoreLogic received results from 2,002. Of those, 1,258 resulted in a sale.

Given the tendency for preliminary estimates to be revised lower as late, often unsuccessful auctions, are reported, it’s likely that the final clearance rate for the week will be lower than the 62.2% level reported one week ago.

In the same week a year earlier, a final clearance rate of 74% was reported.

Weaker clearance rates over the past year reflect a combination of tighter lending standards, affordability constraints, ongoing softness in household income growth and overall sentiment levels towards the outlook for prices and interest rates.

Source: CoreLogic

Digging into the preliminary auction results, renewed weakness in Sydney’s housing market largely explain the decline in the national figure during the week.

“As volumes rose across Sydney, the preliminary clearance rate dropped below 60% for the first time since the first week of February this year,” CoreLogic said.

“The preliminary clearance rate showed 59.8% of the 805 auctions held reportedly sold. However this will likely revise lower as results are finalised early in the week.”

Last week, Sydney recorded a final clearance rate of 63.6% as 588 properties went under the hammer.

Source: CoreLogic

However, while higher stock availability may have contributed to the weekly decline in Australia’s largest and most expensive housing market, the same result was not seen in Melbourne where the preliminary clearance rate rose despite an increase in properties being taken to market.

“Melbourne saw an increase in clearance rates and volumes this week,” CoreLogic said.

“A total of 1,326 Melbourne homes taken to auction returning a preliminary clearance rate of 65.5%, up on the 63.8% last week when 914 auctions were held.”

In that week, Melbourne recorded a final clearance rate of 63.6%.

The mixed performance from Australia’s largest markets was replicated across the smaller capitals during the week.

“Each of the smaller auction markets recorded an increase in auction activity this week,” CoreLogic said.

“The higher activity saw week-on-week clearance rates strengthen across Adelaide, Brisbane and Perth while Canberra and Tasmania returned lower clearance rates.”

Source: CoreLogic

Following the release of its auction report, CoreLogic will release separate data on weekly price movements across Australia’s five mainland state capitals later today.

That will be followed on Tuesday’s by its more comprehensive Hedonic House Price Index for April. This report looks at price movements by location, dwelling type and also includes data on gross returns for housing investors.

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