Australian auction clearance rates have stabilised after earlier falls

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Australian capital city auction clearance rates appear to have stabilised in the high 60% region, having fallen steadily in April and May.

According to preliminary data released by CoreLogic, a national clearance rate of 70.7% was achieved last week across Australia’s capitals, up fractionally on the 70.3% preliminary reported in the previous week.

The group said that there were 1,751 properties taken to auction, down from 2,001 last week, which perhaps contributed to the small increase in sales.

At 73.9%, Melbourne recorded the highest clearance rate of any capital, edging out Sydney for top spot.

“Across Melbourne, preliminary results show that 73.9% of the 716 reported auctions sold this week,” said CoreLogic.

“The strongest rate of clearance was recorded across the outer east region where 80.6% of the 72 reported auctions were successful.”

In Sydney, a preliminary clearance rate of 72.5% was reported, largely unchanged from the preliminary figure of 72.6% in the prior week. Auction volumes were significantly lower, dropping to 650 from 840 in late June.

“Seven of the 15 sub-regions recorded clearance rates above 75.0% with the stand outs being the Eastern Suburbs (88.5%), Baulkham Hills and Hawkesbury (83.3%), Central Coast (81.0%) and Ryde (79.3%) regions,” said CoreLogic.

While below the levels reported earlier this year, the clearance rates for Melbourne and Sydney have historically led to still-brisk gains in dwelling prices.

Of the other smaller capitals, results ranged from 50% in Perth to 63.0% in Canberra.

CoreLogic said that all bar two of the capital cities saw clearances rate increase week-on-week.

This table from CoreLogic shows how individual markets fared during the week.

Source: CoreLogic

CoreLogic expects the final clearance rate for the week will ease into the high 60% region when updated details are released on Thursday, continuing the pattern seen in the prior five weeks.

“Over the past 5 weeks, the final clearance rate across the combined capital cities has been sitting in the mid-high 60% range and it is likely that this will be the case again on Thursday when our final results are published,” it said.

Previously, the preliminary clearance rate of 70.3% was revised down to a final figure of 67.3%.

Final clearance rates have a tendency to be revised lower as late, after unsuccessful results are reported to the group.

The recent stability in the data may have been helped by the introduction of stamp duty concessions for first-time buyers in New South Wales and Victoria.

“First home buyers in New South Wales will save up to $25,000 due to stamp duty discounts. Similarly, Victorian first home buyers will save up to $30,000,” said ANZ’s economics team in a note released in late June.

“This has the potential to boost demand and underpin prices at the lower end of the market.”

Later today, CoreLogic will its home value index, revealing price changes across Australia’s five mainland state capitals last week.

They’ve been increasing in recent weeks, led by Sydney and Melbourne prices, following a period of seasonal weakness that is often evident in the CoreLogic data series during May.