Australian auction clearance rates rebound as new stamp duty concessions begin

Photo: Charles-McQuillan/ Getty Images.

Australian capital city auction clearance rates rebounded modestly last week, rising back above the 70% level.

According to data released by CoreLogic on Sunday, a preliminary auction clearance rate of 70.3% was achieved last week, led once again by Australia’s southeastern capitals, Sydney, Melbourne and Canberra.

The figure was above both the preliminary and final figures of 69.6% and 66.5% released in the previous week. The latter was the lowest level since June last year.

Here’s how individual markets fared during the week.

Source: CoreLogic

Sydney, Melbourne and Adelaide all recorded clearance rates in excess of 70%, explaining the modest rebound in the national figure. Despite the small lift, the final figure is still likely to come in below 70% when CoreLogic releases updated data on Thursday.

The group said the increase coincided with a sharp reduction in properties that were taken to market.

“Auction volumes were lower this week with 1,984 homes taken to auction across the combined capital cities, down from 2,355 last week,” it said.

While fewer homes going under the hammer may have contributed to the lift in clearance rates seen last week, new housing affordability measures for first-home buyers that came into effect on July 1 may have also been a factor.

“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 late last week.

“This has the potential to boost demand and underpin prices at the lower end of the market. The most attractive discounts will apply to properties valued at under $650,000 and $600,000 in New South Wales and Victoria respectively.”

While this could potentially bring forward demand for first-time buyers, ANZ says the impact of these changes “will not have the same impact on the presence of first home buyers that the large cash grants did in 2009-10”.

Later in today’s session, CoreLogic will release its monthly Home Value Index for June.

Despite clearance rates dropping to a one-year low in late June, the group’s daily home price data suggests there’ll be a hefty increase in prices in June, a factor largely driven by seasonal weakness in the CoreLogic data in May rather than an actual surge in house prices in June.

While clearance rates have softened in Sydney and Melbourne since the beginning of the year, at around 70%, they currently sit around levels that have traditionally heralded modest price growth rather than flat outcomes or declines in these markets.

The data will be released at 10am AEST.