Auction clearance rates are inching higher, but home prices are still going backwards

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  • Australian auction clearance rates inched higher last week, despite better reporting levels.
  • Auction volumes remain weak, reflecting soft market conditions and more vendors choosing to sell via private treaty rather than under the hammer.
  • While clearance rates are slowly lifting, prices across all mainland state capitals have fallen this year. The steepest fall has been seen in Melbourne at 3.6%.

Australian auction clearance rates are slowly inching higher, led predominantly by Sydney and Melbourne.

According to CoreLogic, Australia’s combined capitals preliminary clearance rate rose to 57.2% last week, a small improvement on the 56.8% initial estimate released seven days earlier.

CoreLogic

Fewer properties went under the hammer during the week, falling from 2,155 to 1,978.

Of those auctions held, CoreLogic received results from 1,477, or 74.7%. Reporting levels were significantly higher than the 69.5% level seen a week earlier. A final clearance rate in the vicinity of the low to mid 50% range appears likely in the coming days.

In the previous week, the preliminary estimate of 56.8% was revised down to 50.9%

851 homes sold before, at or after auction last week while 626 failed to clear, including 114 that were withdrawn prior to going to market.

By property type, preliminary clearance rates were slightly higher for houses than for units, standing at 57.5% and 56.1% respectively.

CoreLogic

By individual capital, Sydney recorded the highest preliminary clearance rate of any capital at 61.9%. While reporting levels in the city, at 71.4%, were still below the national average, the proportion of results reported was significantly higher than the 60% and 64% levels respectively seen in the prior two weeks.

The improvement in reporting rates in Sydney points to the likelihood of a far smaller downward revision when final clearance rates are released later in the week. Based on previous reporting levels, a revision to the mid to high 50% level appears likely.

Elsewhere, preliminary clearance rates in Melbourne also improved despite better reporting levels, lifting to 58.1% from 53.4% seven days earlier. Like Sydney, a final clearance level in the mid to high 50% appears likely to be seen when CoreLogic releases updated data on Thursday.

Across the smaller capitals, preliminary clearance rates improved in Canberra but fell in all other locations.

Despite firmer clearance rates in Sydney and Melbourne, median home prices in the city continue to fall faster than in other mainland state capitals.

According to CoreLogic’s daily hedonic home price series, median prices in Sydney and Melbourne have fallen by 0.3% respectively in the first seven days of April. Prices have also fallen 0.1% apiece in Brisbane and Perth but have remained flat in Adelaide.

Since the start of the year, prices in Melbourne, Sydney and Perth have fallen by 3.6%, 3.4% and 3% respectively, outpacing falls of 1.1% in Brisbane and 0.6% in Adelaide.

While price falls have now spread across the country, the pace of declines nationally has slowed in recent months, helped in part by fewer new listings and seasonal effects.

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