Australian auction clearance rates began the year as they finished the last: weak

Michael Regan/Getty Images
  • Australian auction clearance rates remain weak, sitting just above the record-lows reported late last year.
  • Auction volumes, as is usually the case at this time of year, are incredibly low at present, meaning it will be hard to get a firm read on market conditions for several weeks.
  • In January, Australian capital city home prices fell by 1.2% following a 1.3% drop in December. Those declines are faster than at any point in the current downturn.
  • CoreLogic will release separate data on early price movements in early February later today.

Australian auction clearance rates began the year as they finished the last: weak.

According to preliminary figures released by CoreLogic, 47.8% of homes across Australia’s capital cities sold either before, at or after auction last week, a small improvement on the levels seen late last year.

In the same corresponding week in 2018, CoreLogic’s preliminary combined capitals clearance rate was revised from 67.7% to a final figure of 62%.

48.9% of houses sold at auction during the week, marginally above the 44.0% level for apartments.

As seen in the chart below form CoreLogic, it’s not unusual for nationwide clearance rates to bounce early in the New Year, partially reflecting that auction volumes are typically well down on normal.

“It is important to note that volumes are significantly lower than what we were seeing at the end of last year and clearance rates are generally less indicative over periods of such low activity,” CoreLogic said.

“As the number of auctions held increases over the next few weeks we will be able to get a firmer perspective on auction conditions for 2019.”

CoreLogic

Last week, CoreLogic received results from 338 of the 526 auctions held across the country, or 62.3%. Of those results received, 162 homes sold while 176 were passed in, including 32 that were withdrawn from the market prior to going under the hammer.

In late December last year — when the data was last collected — just 40% of homes sold across the capitals sold at auction, the lowest proportion since the CoreLogic series began.

The table below from CoreLogic reveals how individual capital city auction markets fared last week.

CoreLogic

Clearance rates ranged from as high as 53.7% in Sydney to as low as 25% in Perth. Given poor reporting levels, the final rankings could look very different to the preliminary results when they arrive in the coming days.

“It’s likely this week’s clearance rates will see the usual downward revision as final results are collected and come in the low-mid 40% range,” CoreLogic said.

Typically, late results are usually for unsuccessful results.

From a historic perspective, the current level of clearance rates is also consistent with further declines in home prices ahead.

According to CoreLogic’s separate Home Value Index released last Friday, Australian capital city home prices fell by 1.2% in January in average weighted terms, building upon the 1.3% drop seen in December that was the largest one-month percentage decline since 1983.

While the declines were once again led by Sydney and Melbourne, median prices fell across all capitals except for Canberra over the month.

CoreLogic will provide the first glimpse of how home prices fared in early February today when it releases separate information based on daily price movements.

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