- Australia’s preliminary auction clearance rate fell last week despite fewer properties going under the hammer and weaker reporting rates.
- The decline in auction volumes reflects a long weekend in four of Australia’s eight states and territories.
- Home prices in Australia’s mainland state capitals continue to ease, although the pace of price declines has slowed compared to recent months. This may reflect seasonal patterns rather than an improvement in market conditions.
According to CoreLogic, Australia’s combined capitals preliminary clearance rate slid to 52.2% last week, below the initial estimate of 55.0% reported seven days earlier.
Across the capitals, 1,196 homes went under the hammer, down substantially from 2,204 in the prior week. The sharp reduction reflects the impact of long weekends across many Australian states, including in Victoria, often the busiest auction market in Australia.
Of those auctions held, CoreLogic received results from 878, representing a reporting rate of 73.4%, marginally below the 73.9% preliminary estimate of seven days earlier.
Of the results received, 459 homes sold prior to, at, or after auction while 419 properties were passed in, including 87 homes that never made it to market.
Preliminary clearance rates for houses stood at 50.8%, below the 55.4% level for units.
The preliminary estimate, along with modest decline in the national reporting rate, points to the likelihood that the final clearance level for the week may fall below 50% despite a sharp reduction in stock on offer.
In the prior week, the preliminary estimate was revised down from 55.0% to 50.4%.
In the same week a year earlier, Australia’s final clearance rate stood at 63.3% from a significant larger 1,764 auctions that took place.
The reduction in volumes over the past year reflects weaker market conditions, contributing to fewer vendors from putting their home up for sale. Softer demand has also contributed to more vendors choosing to sell via private treaty, rather than at auction.
Across individual capital city markets, preliminary clearance rates in both Melbourne and Sydney fell despite fewer properties going under the hammer compared to a week earlier.
In Sydney, a preliminary result of 58.2% was recorded from 702 auctions held, down from 61.3% a week earlier when 799 homes were put up for sale.
For Melbourne, a preliminary reading of 53.5% was recorded despite just 215 homes going under the hammer, well below the 1,046 of a week earlier when 54.9% of homes cleared.
Across the smaller capitals, preliminary clearance rates rose in Adelaide but fell in Brisbane, Canberra and Perth week-on-week.
Based on transaction data received from CoreLogic from prior sales, median home prices across most mainland state capitals continued to fall last week, albeit the declines are now substantially smaller than those reported earlier in the year and in late 2018.
Sydney’s median price fell 0.15% from a week earlier, according to CoreLogic’s daily price series, outpacing declines of less than 0.1% in Melbourne and Adelaide and unchanged results for Brisbane and Perth.
Month to date, prices in Sydney have fallen 0.3% and 0.2% in Sydney and Melbourne respectively, while those in all other mainland state markets have declined by less than 0.1%.
“Price declines in February were less than the average decline over the past few months, but still faster than the average seen over the rest of 2018,” Morgan Stanley’s Australian Equity Strategy team said in a note released earlier this month.
“This improvement is in line with the usual seasonal trends in house prices, with December and January typically significantly weaker.
“If the seasonal pattern holds, we can expect another improvement in price growth in March — typically the strongest month for price growth — even without an underlying improvement in the housing market.”
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