Australia’s housing market continues to cool with auction clearance rates coming in below 70% again last week.
According to preliminary data from CoreLogic, a national clearance rate of 69.6% was achieved across the nation’s capitals, continuing the trend seen in the prior two weeks.
Of the 2,407 auctions held, the group received results from 1,933. Of those, 1,361 properties sold while 572 remained uncleared.
While slightly higher that the 67.8% final clearance rate recorded in the previous week, the lowest so far in 2017, given the preliminary data is often revised lower as often unsuccessful results are reported to the group later, it’s likely the week’s final reading — released this Thursday — will be even lower.
The preliminary figure for the prior week was originally reported at 71.8%.
Clearly, curbs on investor lending and higher mortgage rates, along with affordability constraints, are now acting in tandem to cool what were hot housing market conditions in Australia’s southeastern capitals.
This table from CoreLogic shows how individual markets fared last week.
Sydney, at 72.4%, recorded the highest clearance rate of all the capitals, closely followed by Melbourne and Adelaide at 72.2% and 71.8% respectively.
While the preliminary figure for Sydney was higher than the final reading in the prior week, CoreLogic suggests it too will be revised below the 70% level when the final data is released.
“Across Sydney, preliminary results show an improvement in the rate of clearance after last week’s final result saw the clearance rate drop below 70%, however as more results are collected it’s likely Sydney’s final clearance rate will again slip below the 70% mark,” it says.
In the prior week, Sydney recorded a final clearance rate of 67.7%, the lowest level since April 2016.
CoreLogic said Melbourne’s auction results “have also moderated” in recent weeks.
Indeed, at 72.2%, the preliminary figure was below the 75.9% final result reported in the prior week.
The moderation in clearance rates suggests that prices will likely follow suit. However, at current levels, it only points to a slowdown in price growth based off historic norms, rather than an outright decline in home values.
Fitting with that view, prices in Australia’s five mainland state capitals have increased by 0.6% over the past month in weighted average terms, according to separate data released by CoreLogic today, a noticeable step-down from the levels seen earlier this year when clearance rates were higher.
Prices in Sydney and Melbourne — those markets with the highest clearance rates nationally — saw values lift 0.6% apiece over the same period with noticeable strength last week reversing modest declines reported in late May and early June.