Australian auction clearance rates are continuing to recover, boosted by record-low interest rates, declining inventory levels and elevated asset prices elsewhere, and led yet again by Sydney.
According to preliminary figures released by CoreLogic today, auction clearance rates across Australia’s capitals rose last week to the highest level seen in over a year.
“1,747 capital city auctions were held and preliminary results show that 1,485 auctions have been reported so far, with a preliminary clearance rate of 76.6%, rising from 75% last week across 1,471 auctions,” said CoreLogic.
The national figure was also well above the 72.9% level recorded in the same corresponding week in 2015. The group will release finalised figures on Thursday.
The table below from CoreLogic breaks down the national figures by individual capitals.
Continuing the theme of recent months, the strength was yet again led by Sydney — the largest and most expensive property market of all the capitals — with a preliminary figure of 86.4% reported.
While the strength in the Sydney and Melbourne figures is nothing new, CoreLogic notes that “Canberra and Brisbane have also shown strengthening clearance rate performance”.
The chart below from CoreLogic tracks the trend in national auction clearance rates going back six years. After weakening to below 60% in the early parts of 2016, it has steadily increased in recent months, coinciding with the two interest rate cuts delivered by the RBA in May and August.
Along with lower interest rates, CoreLogic notes that 500 fewer properties went up for auction last week compared to the same week a year ago, perhaps contributing to the recent lift in clearance rates.
Fitting with the decline in auction volumes, new property listings — defined by the group as properties put up for sale over the past 28 days that have not been advertised for sale over the past 6 months — falling by 6.6% over the past year to 24,459.
New listings in Sydney and Melbourne in the past month stood at 6,299 and 7,456, down 20.6% and 9.4% respectively on the levels of a year ago.
The table below from CoreLogic has all the details.
With volumes and clearance rates moving in the opposite direction, house prices also lifted, rising by 0.2% across the nation last week.
Prices increased by 0.6% in Sydney according to CoreLogic’s capital city home value change index, managing to offset price declines across Brisbane, Adelaide and Perth and an unchanged prices in Melbourne.
Over 2016, capital city house prices have increased by 6.8%, led by an 11.4% jump in Sydney.
According to CoreLogic, the index is based on a ‘hedonic’ methodology, which includes the attributes of properties that are transacting as part of the analysis.
The group believes that “understanding factors such as the number of bedrooms and bathrooms, the land area and the geographic context of the property allows for a much more accurate analysis of the true value of movements across specific housing markets”.
It differs from alternate Australian house price surveys that use transacted sale prices to measure current housing market conditions.