Australian auction clearance rates continue to plummet

Photo: Daniel Munoz/ Getty Images.
  • Australian auction clearance rates continued to slide last week despite a sharp reduction in properties going under the hammer.
  • Melbourne’s preliminary clearance rate, at 56.1%, was the lowest level since 2012. Sydney’s auction clearance rate hit a multi-year low in the prior week.
  • Despite the weak result, the median home price across Australia’s mainland state capitals was unchanged last week.

Australian auction clearance rates continued to slide last week despite a sharp reduction in properties going under the hammer.

According to CoreLogic, a preliminary combined capitals clearance rate of 55.3% was recorded, down from the prior week’s preliminary figure of 57.6%.

CoreLogic

“Auction volumes fell significantly this week due to the Queen’s Birthday long weekend in most states and territories,” CoreLogic said.

“There were 900 homes taken to auction across the combined capital cities, down from 2,281 last week and 1,279 this time last year.”

Of the 900 homes that went under the hammer, the group received results from just 678.

Of those result received, 378 properties sold before, at or after auction while 234 were passed in. Sixty-six were withdrawn from market prior to going to auction.

Continuing the recent theme, clearance rates for units continued to outperform those for houses, standing at 61.7% and 52.6% respectively for the week.

Given the large number of unreported results, some 222, it suggests that the final clearance rate for the week — released on Thursday — may fall below the five-year low of 54.1% set in early June.

“Once the remaining results are collected over the next few days, it is possible that the final clearance rate for this week rate will revise even lower,” it said.

Both Sydney and Melbourne — Australia’s busiest auction markets — recorded preliminary figures below 60%.

Reflecting public holidays in both states, volumes in both cities fell substantially, dropping to 414 and 276 respectively, down from 837 and 1,079 a week earlier.

At 56.1%, Melbourne’s preliminary clearance rate was the lowest level since 2012.

Auction volumes were also lower across most individual capital cities with the exception of Perth.

At 65.5%, Adelaide recorded the strongest preliminary clearance rate across the country, narrowly edging out Canberra for that title.

This table from CoreLogic shows how each individual capital fared last week, as well as the level seen in the same corresponding week a year earlier.

CoreLogic

Despite the slide in clearance rates, the median price across Australia’s five mainland state capitals was unchanged over the week in average weighted terms.

According to CoreLogic, prices rose by 0.1% in Sydney, Brisbane and Adelaide, offsetting a flat result in Melbourne and 0.1% decline in Perth.

CoreLogic

As with the auction clearance rates data, weaker-than-usual activity levels means the performance last week should be treated with caution.

Over the past month, prices have fallen by 0.5% in Melbourne, 0.2% in Perth and 0.1% in Sydney, leaving the average median across Australia’s five mainland state capitals down 0.2% over that period.

In contrast, prices in Adelaide and Brisbane have risen 0.4% and 0.3% respectively over the past four weeks.

That recent divergence is also evident in year-to-date price movements with gains of 0.2% in Brisbane and Adelaide masked by declines in all other mainland state capitals.

Contributing to the recent weakness in Sydney and Melbourne, the amount of properties listed for sale in both cities has risen over the past year, increasing by 19.2% and 7.7% respectively.

CoreLogic

In all other capital city markets, total listings were either flat to lower compared to a year ago.

However, suggesting that weaker market conditions in Sydney and Melbourne may be discouraging vendors from going to market, CoreLogic says new listings in both cities — defined as those that have not been advertised for sale over the past six months — falling by 11.8% and 4.5% respectively from the levels seen 12 months ago.

New listings have also fallen in all of Australia’s capital cities over the past year, potentially reflecting stronger conditions than in Australia’s largest housing markets.

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