Auction clearance rates in Sydney and Melbourne remain below 60%

Quinn Rooney/Getty ImagesSluggish.
  • Preliminary auction clearance rate improved marginally last week, lifting from 55.3% to 56.9%.
  • Auction volumes were substantially higher reflecting the impact of the Queen’s Birthday long weekend in early June.
  • CoreLogic will release home price data from Australia’s five mainland state capitals later today.

Activity levels across Australia’s housing market picked up last week following the Queen’s Birthday long weekend in early June.

However, the prevailing themes remain much the same.

Auction clearance rates across the capital cities are anchored below 60%, driven by continued weakness in the two largest markets, Sydney and Melbourne.

According to preliminary figures from CoreLogic, just 56.9% of properties sold before, at, or after auction last week, up marginally from the 55.3% preliminary estimate released one week earlier.

Reflecting the impact of public holidays in many parts of the country in early June, auction volumes were substantially higher, lifting to 1,991, more than double the 904 a week earlier.

Of the properties that went under the hammer, CoreLogic received results from just 1,477. 844 auctions cleared while 518 failed to sell. 115 were withdrawn from market prior to auction.

Continuing the recent trend, 59.1% of apartments cleared, marginally ahead of the 56.1% level for houses.

The large number of unreported results, some 514, points to the likelihood that the final combined capitals clearance rate will be revised lower when released on Thursday.

In the prior week, a final clearance rate of 53.8% was reported, the lowest level in five years.

This week’s final figure could well be lower given the tendency for downward revisions to preliminary estimates.

CoreLogic

By individual capital, Adelaide recorded the strongest preliminary clearance rate across the country at 72.7%, well above the levels in other locations.

In Melbourne, the busiest auction market last week, a preliminary clearance rate of 58.7% was recorded, marginally above the 56.1% preliminary estimate of a week earlier which was the lowest level since 2012.

The small improvement came despite a sharp increase in properties going under the hammer, lifting from 275 to 988 over the week.

One year ago, Melbourne returned a final clearance rate of 71% from 1,129 auctions held.

In contrast to Melbourne, Sydney’s preliminary clearance rate fell last week, dropping to 55.8% from 57.6% in early June. 701 auctions took place in the city, up from 415 a week earlier.

In the corresponding week a year ago, Sydney was home to 927 auctions returning a clearance rate of 68%.

As seen in the table below, the level of reporting in Sydney was particularly low, pointing to the likelihood of a substantial downward revisions when final figures are released later this week.

CoreLogic

Across the smaller capitals, preliminary results in Adelaide, Brisbane and Perth all improved from the prior week. Canberra’s preliminary estimate fell.

CoreLogic will release separate data on weekly price movements across Australia’s five mainland state capitals later today.

Modest price declines in Sydney and Melbourne have been seen frequently in recent months, dragging nationwide price measures lower.

Given ongoing softness in clearance rates last week, similar results may well be seen in the updated data.

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