Australian home prices are still falling but the pace appears to be slowing

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  • Increased speculation over possible RBA rate cuts has done little to support Australian auction clearance rates or home prices, according to updated data from CoreLogic.
  • A preliminary clearance rate of 54.6% was recorded across the capitals last week, pointing to a final result of around 50% given soft reporting levels.
  • After stabilising in the prior week, CoreLogic’s daily hedonic home value index resumed its slide last week, led by falls in Sydney and Melbourne.

Increased speculation about possible near-term interest rate cuts from the Reserve Bank of Australia (RBA) has done little to boost auction clearance rates or home prices.

According to latest data from CoreLogic, Australia’s preliminary combined capitals auction clearance rate stood at 54.6% last week, an improvement on the sub-50% result of seven days earlier but below the levels seen prior to the Easter break.

In the prior week, the preliminary rate was revised down from 49.0% to show a final reading of just 43.9%, the second-lowest level this year.

CoreLogic

1,019 homes went under the hammer last week, a low level, even compared to recent trends, reflecting the impact of school holidays and the Easter and Anzac Day public holidays.

CoreLogic received results from 738 auctions, equating to a reporting rate of 72.4%.

405 homes sold before, at or after auction while 333 were passed in, including a sizable 74 properties that never made it to market.

The soft reporting level suggests final clearance rates for the week will be be revised down to around 50% or just above when released on Thursday by CoreLogic. One year ago, a final clearance rate of 60.3% was achieved in the same corresponding week.

By type of property, the preliminary clearance rate for houses across the capitals stood at 56.8% last week, substantially higher than the 49.6% level recorded for units.

By individual capital, Sydney, at 57.1%, recorded the highest clearance level nationally, although weak reporting will likely see a large downward revision to the final estimates released in the days ahead.

Melbourne, the busiest capital city auction market nationally, recorded a preliminary estimate of 55.7% while Adelaide also came in above 50% at 54.8%. All other capitals recorded preliminary estimates below 50% during the week.

CoreLogic

Mirroring the softness in auction markets, home prices also resumed their slide after stabilising briefly in the prior week.

According to CoreLogic’s daily hedonic series, median prices across Australia’s five mainland state capitals fell by 0.14% in the week to Sunday in average weighted terms.

The national decline was led by Sydney where median prices slipped by 0.2%, marginally faster than Melbourne at 0.16%. Elsewhere, median prices in Brisbane and Perth fell by less than 0.1% while Adelaide prices managed to buck the overall trend, lifting by less than 0.1%.

With just a couple of days left in the month, median prices across the mainland capitals have fallen by 0.5% so far in April in average weighted terms, driven by declines of as much as 0.6% in Sydney and 0.5% in Melbourne.

CoreLogic will release its more comprehensive monthly hedonic home value index for April on Wednesday, May 1.

Given the trends in the daily series, a national decline of around 0.5% is likely, continuing the moderation in the pace of price declines seen in recent months.

Typically, prices tend to be seasonally stronger in March and April compared to periods in the middle, end and start of each year, according to analysis from Morgan Stanley.

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