The temperature is rising outside, but Australia’s housing market continues to cool.
According to CoreLogic, Australia’s combined capital city preliminary clearance rate fell to 63.1% last week, fractionally below the 63.5% preliminary level reported in the previous week.
It was also significantly lower than the 71.6% final clearance rate reported in the same week in 2016.
Continuing the theme seen over the past few months, the slide in the national figure was yet again due to weakness in Sydney, where preliminary clearance rate slumped to just 58.7%, well below the 62.4% preliminary level reported one week earlier.
In the same corresponding week in 2016, Sydney’s final auction clearance rate stood at 73.7%.
A total of 990 auctions were held across Australia’s largest and most expensive city over the week, down from 1,143 auctions in early December.
Given that the preliminary figure will be revised lower as tardy, often unsuccessful auction results, are reported to CoreLogic, it appears likely that the final figure for the week — released on Thursday — will show Sydney’s final clearance at or near a fresh multi-year low.
The final clearance rate in Sydney in early December stood at 56.2%.
Reports from other groups suggest that a larger-than-usual number of properties scheduled to go to auction in Sydney have been taken off the market during the past month, potentially flattering clearance rates over this period.
While not to the same scale as Sydney, clearance rates in Melbourne are also significantly lower than the levels seen earlier this year.
CoreLogic said that a preliminary reading of 67.4% was reported, up from a preliminary figure of 66% a week earlier.
Making that small bounce all the more impressive, it came despite a surge in the number of properties that went under the hammer. CoreLogic said 1,837 auctions were held in Melbourne, making it the second-busiest week for activity this year.
Despite the rise in the preliminary clearance rate, a final figure of 65.3% or below will see Melbourne record a fresh multi-year low in the current cycle.
“The lower weighted clearance rates of late can be attributed to the continual softening conditions across the two largest markets of Melbourne and Sydney with clearance rates tracking below 70% across Melbourne for five consecutive weeks… while Sydney’s clearance rates have tracked around the mid-to-high 50% range over seven consecutive weeks,” CoreLogic said.
Across Australia’s smaller markets, preliminary clearance rates rose in Brisbane and Adelaide but fell in Perth, Tasmania and Canberra.
Mirroring the decline in auction clearance rates and housing finance from the levels reported earlier this year, Australian house price growth has slowed sharply in recent months.
According to separate data from CoreLogic released earlier this month, capital city house price grew by just 0.2% in average weighted terms in the three months to November, seeing the annual rate of growth slow to 5.5%, just half the level reported in May this year.
In Sydney — where clearance rates have softened the most over that period — prices fell by 1.3% in between August to November. In comparison, prices in Melbourne grew by 1.9% over the same period, although that too is well below the levels reported earlier this year.
CoreLogic will release updated weekly house price data for Australia’s five mainland state capitals later today.