Australian auction clearance rates have fallen to the lowest level since early 2016

MELBOURNE, AUSTRALIA – JULY 28: Lance Franklin of the Swans and Luke Hodge of the Hawks push and shove during the round 19 AFL match between the Hawthorn Hawks and the Sydney Swans at Melbourne Cricket Ground on July 28, 2017 in Melbourne, Australia. (Photo by Quinn Rooney/Getty Images)

Australian auction clearance rates have fallen to the lowest level since early 2016, thanks largely to another underwhelming performance from the nation’s largest and most expensive market, Sydney.

According to CoreLogic, a final clearance rate of 61.5% was recorded across Australia’s capital cities last week, down from 64.5% in the previous week.

Not only was that the weakest result in over 18 months, it was also well below the 73.6% clearance rate recorded in the same corresponding week in 2016.

Source: CoreLogic

That’s yet another sign that the broader Australian property market is cooling down.

With many Victorians focused on holidays and horse races rather than property auctions, the weakness in the national figure largely reflected another soft result from the Sydney market which saw its final auction clearance rate come in under 60% for a second consecutive week.

At 59.8%, Sydney’s clearance rate was marginally higher than the 58.3% level recorded one week earlier. Reflective of recent price falls in the city, last week’s clearance rate was well below the 78.8% level reported a year ago.

The Eastern suburbs was the only region to record a clearance rate in excess of 70%.

With most Melburnians enjoying a long weekend ahead of the Melbourne Cup, auction volumes in Australia’s second largest market were down heavily, falling to 318 from a record 1,983 one week earlier.

That likely contributed to the uptick in the city’s final clearance rate to 74.3% from 70.2%.

Outside of Australia’s largest centres, CoreLogic said clearance rates improved in Adelaide, Brisbane and Tasmania but fell in Canberra and Perth.

Source: CoreLogic

The small number of auctions held in Melbourne and the weakness in the Sydney market explain the weakness in the national figure despite the mixed performance seen during the week.

Turning to the week ahead, auction volumes nationally will rise sharply thanks to a resumption of normal business in Victoria with 2,714 properties set to go under the hammer.

Melbourne, with 1,209 auctions, is the busiest individual market, coming in ahead of Sydney where 1,032 properties go up for sale.

CoreLogic says Reservoir in Melbourne will be the busiest suburb with 21 auctions scheduled. Bentleigh East and Craigieburn, both in Melbourne, will also host 16 auctions each.

Outside of Melbourne, Randwick in Sydney will also be busy with 16 properties on offer.

Want to read a more in-depth view on the trends influencing Australian business and the global economy?

BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future.

Sign up for free at research.businessinsider.com.au.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.