- Auction clearance rates across Australia’s capital cities firmed a touch last week despite a large increase in properties going under the hammer.
- Clearance rates in Sydney and Melbourne remain at levels that are consistent with continued price declines ahead.
- Adelaide recorded the highest preliminary clearance rate across the capital last week. Prices in the city have risen marginally this year, escaping the downdraft seen in larger southeastern capital city markets.
Auction clearance rates across Australia’s capital cities firmed a touch last week despite a large increase in properties going under the hammer.
However, they still remain at levels that are consistent with further price decline in the period ahead.
According to CoreLogic, a preliminary combined capitals clearance rate of 50.2% was recorded last week, up marginally from the 49.8% preliminary estimate reported seven days earlier.
The small improvement came despite a large increase in auction volumes which jumped from 2,119 to 2,919 week-on-week.
Reporting rates were also firmer with CoreLogic receiving results from 2,117 of the 2,919 auctions held, or 72.5%. A week earlier, a preliminary reporting rate of 71% was achieved.
Of those results received, 1,063 homes sold either prior to, at or after auction. A total 1,054 auctions failed to clear, including 160 that were pulled prior to going to market.
CoreLogic said 49% of reported housing auctions resulted in a sale, again below the 53.3% level for units.
Despite the small improvement in reporting rates, with 802 results still yet to be received, the final clearance rate for the week is likely to be revised sharply lower when CoreLogic releases final figures for the week on Thursday.
In the prior seven day period, the preliminary clearance rate was revised down to 46%, near the lowest level in over six years.
One year ago, a final clearance rate of 64.5% was achieved despite a massive 3,713 properties going under the hammer, significantly higher than the 2,919 seen last week.
The decline in auction volumes reflects softer housing market conditions over the past year, especially in Melbourne and Sydney. At current levels, the proportion of successful auctions still points to a continuation of further modest price declines across the capitals in weighted terms in the period ahead.
CoreLogic will release updated weekly price movements for Australia’s five mainland state capital later today. It will be interesting to see whether the modest uptick in clearance rates last week was driven by price discounting from vendors.
Helping to explain the modest increase in the national combined capitals clearance rate last week, the percentage of successful auctions in Melbourne increased despite a large increase in stock going to market.
CoreLogic said 49.8% of reported auctions resulted in a sale, up from the prior weeks preliminary estimate of 47.5%. Reporting rates were also firmer, increasing to 78.3% from 77.7% seven days earlier.
As many as 1,706 auctions took place across the city, up from 1,088 in the preliminary estimate offered one week earlier.
Despite the modest improvement last week, it’s likely the final clearance rate will be revised down as tardy results are received in the days ahead.
Melbourne’s preliminary estimate was revised down to 45.7% in the prior week, the lowest level since June 2012. In the same week a year ago Melbourne hosted 1,983 auctions, delivering a final clearance rate of 70.2%.
While Melbourne’s preliminary clearance rate improved a touch last week, Sydney’s success rate eased a touch, falling to 50.7% from 52.2%.
Australia’s largest and most expensive city hosted 796 auctions, higher than the 659 homes that went under the hammer one week earlier. Reporting rates improved slightly week-on-week, lifting from 65.1% to 66.2%.
The still-large number of unreported results suggests Sydney’s final clearance rate will be revised lower in the days ahead.
In the prior week, Sydney’s preliminary estimate of 52.2% was revised down to a final print of just 44.6%, near the lowest level in a decade. One year ago it recorded a final clearance rate of 58.3% from 1,215 auctions held.
Clearance rates in both Melbourne and Sydney sit at levels that are consistent with further price declines in the weeks ahead.
Across the smaller capitals, preliminary clearance rates improved in Adelaide and Canberra last week but fell in Brisbane and Perth.
Adelaide, where home prices have increased modestly so far in 2018, recorded the highest success rate across the capitals at 67.9%.
In the coming weeks, auction activity is likely to increase even further ahead of a seasonal slowdown in summer.
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