Auction clearance rates climb to the highest level in over a year

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  • Auction clearance rates rose to the highest level in over a year following the federal election.
  • Sydney’s clearance rate topped 60% while Melbourne’s wasn’t far behind. Prices in these cities both increased last week, something that has not been seen since late 2017.
  • A number of forecasters now expect smaller price falls in Australian home prices this year. Some even expect that prices may soon start to increase.
  • Auction activity will slow this week with 1,518 homes set to go under the hammer.

Auction clearance rates rose to the highest level in over a year following the federal election, coinciding with an increase in median home prices in both Sydney and Melbourne.

According to CoreLogic, Australia’s combined capitals clearance rate rose to 57.7% last week, up from 55.2% in the week prior to the election.

CoreLogic

The modest lift came despite a substantial increase in market activity with 2,055 homes going under the hammer, over double the 930 level of a week earlier.

Of those, CoreLogic received results from 1,815, or 88.3%. That reporting rate was a substantial improvement on the 82.6% level of the prior week.

1,048 homes sold prior to, at or after auction. 767 properties failed to clear.

In the same corresponding week in 2018, a final clearance rate of 26.2% was recorded from 2,297 auctions that took place. So volumes were a touch lower but the clearance rate this year was higher.

CoreLogic

By individual capitals, Sydney recorded the highest clearance rate nationally at 62.1%, lifting from 56.5% in the previous week. That too was the highest clearance level in over a year.

CoreLogic received results from 86.8% of the 707 auctions that took place in the harbour city, a steep improvement from the 72.4% reporting level seen seven days earlier.

Melbourne’s final clearance rate softened over the same period, declining to 59.6% from 60.7%.

968 auction were held across the city. CoreLogic received results from 89.8%, again higher than the 81.2% level seen seven days earlier.

According to separate data from CoreLogic, median home prices in both Sydney and Melbourne increased during the week, lifting by 0.3% and 0.1% respectively.

Not since late 2017 have prices in Australia’s largest and most expensive housing markets both increased in the same week.

Across the smaller capitals, Canberra’s final clearance rate rose to 60.7%, up from 51.7% a week earlier. Elsewhere, final clearance rates in all other capitals with the exception of Perth fell week-on-week.

The improvement in national clearance rates last week, accompanied by the lift in median home prices in Sydney and Melbourne, has not gone unnoticed by Australian housing forecasters with a number now predicting smaller nationwide price falls this year. Some are even expecting prices to begin to lift within the next couple of months.

The prospect of RBA rate cuts and a modest relaxation in home loan lending standards, accompanied by the Coalition’s election victory and additional support for first home buyers, are the main factors that have led to recent price upgrades.

Looking ahead, activity across the county will slow in the coming week with 1,518 auctions set to take place.

684 of those will take place in Melbourne with 639 going under the hammer in Sydney. Volumes will also fall in all remaining capitals.

NOW READ: ‘Within months’: Macquarie believes Australian house prices could increase far sooner than many think

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