- Preliminary auction clearance rates across Australia’s capital cities rebounded fractionally last week, recovering after hitting a multi-year low in the middle of September.
- Reporting rates were similar to the week despite an increase in properties going under the hammer.
- The broader result points to the likelihood of further modest declines in home prices in the period ahead.
Preliminary auction clearance rates across Australia’s capital cities rebounded fractionally last week despite more properties being taken to market, recovering after hitting a multi-year low in the middle of September.
According to CoreLogic, a preliminary combined capitals clearance rate of 55.5% was achieved, up from 55% seen one week earlier.
2,404 properties went under the hammer, an increase from 1,985 in the previous seven day period. The reporting rate to CoreLogic stood at 75.5%, unchanged from the level seen one week earlier.
Reflecting that softer market conditions may be dissuading some vendors from listing their property, or encouraging sales by private treaty, the number of auctions held across the capitals was down 378 on the same corresponding week a year ago. Back then, a final clearance rate of 66.2% was achieved.
Of the 1,814 results received by the group last week, 1,010 homes sold prior to, at or after auction. As many as 804 properties failed to clear, including 175 that were pulled prior to going under the hammer.
The large number of unreported results points to the likelihood that the preliminary figure will be revised lower when CoreLogic releases final numbers on Thursday. In the previous week, the preliminary result was revised down from 55% to 51.8%, a result that is likely to be repeated on this occasion.
As has been the case for some time, preliminary clearance rates for units continued to outperform those for houses, standing at 57.7% and 54.7% respectively for the week.
By individual capital city, preliminary clearance rates in Melbourne, Australia’s busiest market, softened, falling to 55.5% from 57.2% one week earlier. In contrast, Sydney’s market firmed a touch, lifting from 52.6% to 57.3% week-on-week.
Both cities recorded an increase in auction volumes, lifting to 1,158 and 850 respectively, up from 991 and 665 one week earlier.
Across the smaller capital city markets, clearance rates improved in Adelaide but weakened in Brisbane, Perth and Canberra compared to the prior week.
From a broad perspective, CoreLogic said the national performance last week is indicative of “subdued auction conditions over the first three weeks of spring”.
“Finalised clearance rates have held in the low-mid 50% range for the last eight weeks and it’s likely that this week will return a similar result,” the group said.
Shane Oliver, Chief Economist at AMP Capital, said the results are also consistent with further declines in home prices in Australia’s largest housing markets, particularly Sydney, the capital where prices have fallen the fastest so far in 2018.
— Shane Oliver (@ShaneOliverAMP) September 22, 2018
Markets will get further information on that front today when CoreLogic releases updated weekly price movements for Australia’s five mainland state capitals, Sydney, Melbourne, Brisbane, Adelaide and Perth.
In the prior week, the group said prices in these capitals fell 0.1% in average weighted terms, leaving the decline over the past 12 months at 3.5%.
Over the year, prices in Sydney fell 5.9%, while those in Melbourne and Perth fell 2.5% apiece. In contrast, values in Brisbane and Adelaide rose by 0.7% and 0.9% respectively over the same period.
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