- Australian auction clearance rates continue to fall, pointing to the likelihood that prices will continue to weaken in the months ahead.
CoreLogic reported a preliminary clearance rate of just 57.6% across the capitals. Sydney, at just 52.3%, was particularly weak.
- CoreLogic release separate data on prices and property listings later today.
Australian auction clearance rates continue to fall, pointing to the likelihood that prices will continue to weaken in the months ahead.
According preliminary figures released by CoreLogic, a combined capital city clearance rate of just 57.6% was recorded last week, well below the 59.7% preliminary estimate released in the final full week of May.
In the same corresponding week in 2017, a final national clearance rate of 69.8% was reported.
Of the 2,272 properties that went under the hammer during the week, CoreLogic received results from just 1,760.
Within that figure, 1,022 properties sold while 738 failed to sell. Of the unsuccessful results, 144 properties were withdrawn prior to auction while 564 were passed in.
Given the large number of unreported results, some 512, it suggests that final clearance rate for the week — released on Thursday — may fall below the five-year low of 56.2% set in late May.
Final clearance rates tend to be revised lower as late, often unsuccessful results, are reported to the group.
Continuing the recent trend, clearance rates for units continued to outperform those for houses, coming in at 63.7% and 55.0% respectively over the week.
By individual capital, a sharp drop in Sydney’s clearance rate, Australia’s largest and most expensive property market, drove the national decline last week.
It’s preliminary clearance rate tumbled to just 52.3%, more than 10 percentage points below the preliminary estimate released in the prior week.
Auction volumes in the city increased marginally, rising to 830 from 814.
Hinting that the final figure may come in below 50%, CoreLogic received results from just 593 of the 830 auctions held over the week.
“As results are collected it will be interesting to see if the final clearance rate will remain above 50%,” CoreLogic said.
“The last time Sydney’s clearance rate fell below 50% was briefly over the last week of January in 2016. Prior to that it was between late 2010 and 2012 as the market moved through a downturn.”
However, while Sydney’s preliminary figure tumbled, Melbourne’s went in the other direction, lifting modestly to 61.6% from 60.9% as auction volumes fell from 1,132 to 1,079.
Despite the small improvement in the preliminary figure, final results are still likely to come in below 60%, leaving it close to or below the four-year low of 59% recorded in the prior week.
Many analysts believe weakness in Sydney and Melbourne clearance rates, along with softness in other housing indicators such as lending finance, housing credit growth and foreign investment approvals, point to the likelihood that prices will remain under pressure for some time yet.
Outside of those capitals, CoreLogic said preliminary clearance rates rose in Brisbane and Adelaide but fell in Perth and Canberra over the week.
“The performance across the smaller auction markets was varied last week with Adelaide returning the strongest preliminary clearance rate of 68.2% while only 26.7% of homes sold across Perth,” it said.
Later today, CoreLogic will release separate data on weekly, quarterly and annual price movements from Australia’s five mainland state capitals — Sydney, Melbourne, Brisbane, Adelaide and Perth.
In recent weeks, prices in Sydney and Melbourne have been falling, masking more resilient performances across Australia’s smaller capital cities.
Property listings have risen in Sydney and Melbourne over the past year, contributing to the recent price divergence seen across the country.
This table from CoreLogic has detailed information on individual auction markets last week.