- Australian auction clearance rates rose last week, helped by a surprise bounce in Sydney.
- More than 50% of reported results in Sydney cleared, an outcome that suggests recent price falls may be encouraging buyers back to the market. Vendor price expectations may also be another factor.
- CoreLogic will release weekly price data for Australia’s mainland state capitals later today. In the prior week, Sydney prices tumbled by 0.5%, hinting that vendors may be accepting lower offers in order to secure a sale before the Christmas and New Year break.
Auction clearance rates in Australia rose last week, helped by a surprisingly resilient performance from Sydney’s housing market, at least compared to recent standards.
According to preliminary figures released by CoreLogic, Australia’s combined capitals clearance rate rose to 46.9%, up from 45.5% one week earlier.
Auction volumes across the nation fell fractionally from a week earlier, potentially helping to lift the preliminary estimate, dropping to 2,689 from 2,753 seven days earlier.
CoreLogic received results from 1,871 of the 2,689 auctions held, representing a reporting rate of 69.5%. That was below the 72.9% level of a week earlier, and may have also contributed to the small lift in the preliminary estimate last week.
Of those results received, 876 homes sold before, at or prior to auction while 995 homes failed to clear. A sizeable 208 homes were withdrawn prior to going to market.
While the lower reporting rate points to the likelihood that the preliminary estimate will be revised lower when final figures are released later in the week, it’s unlikely to be as weak as the multi-year low of 42% seen one week earlier. And if it is lower, it’s unlikely to be substantially so.
By type of property, CoreLogic said clearance rates for apartments were substantially higher than for houses across the country, standing at 52.4% and 44.8% respectively.
So the modest headline improvement last week largely reflected an improved performance from the apartment sector, suggesting that market conditions are holding up better for more affordable properties in comparison to more expensive segments.
By capital city, Sydney recorded a surprisingly resilient performance with the preliminary clearance rate lifting sharply despite a noticeable increase in auction activity across the city.
CoreLogic said 52.4% of reported results in Sydney cleared, up from 48.5% seven days earlier. 1,021 homes went under the hammer across the city, up from 874 in the prior week.
Reporting rates were much the same as seven days earlier, standing at 65%. That was only marginally below the 65.3% level reported previously.
While the weak reporting level points to the probability of a large downward revision when final figures are released on Thursday, it’s unlikely to be the same degree seen one week ago when Sydney’s preliminary result was revised down from 48.5% to 42.8%.
Although one week does not make a trend, the surprise lift in Sydney’s preliminary figure suggests recent price falls in the city may now be encouraging buyers to wade back into the market, as suggested by recent data released by Westpac.
It could also reflect that vendors are starting to adjust their price expectations, particularly ahead of a seasonal slowdown in market activity over summer.
While Sydney’s preliminary clearance rate rose noticeably, they continued to sit near multi-year lows in Melbourne, coming in at 44% from 43.5% seven days earlier.
Activity across the city fell from a week earlier, largely reflecting that Victoria’s state election was held last weekend. 1,137 homes went under the hammer, down from 1,411 a week earlier.
Reporting rates in Melbourne were also lower, falling from 79.1% to 77.9% week-on-week.
In the prior week, Melbourne’s preliminary clearance rate was revised down to a final figure of 41.3%, the lowest since June 2012.
Across the smaller capitals, preliminary clearance rates improved in Brisbane but fell in Adelaide, Perth and Canberra.
For the second week running, Adelaide’s preliminary result also came in at over 50%, suggesting market conditions are firmer in the South Australian capital compared to most other markets across the country.
Attention will now turn to separate CoreLogic data on weekly price movements across the mainland state capitals that will be released later today.
Last week, prices in Sydney slumped by 0.5%, hinting that vendors were willing to offer greater price discounts in order to secure a sale before the Christmas break.
Year-to-date, price have fallen in each mainland state capital except for Adelaide and Brisbane.
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