Australian auction clearance rates rebound as property prices fall

Photo Robyn Beck / AFP /Getty Images

Australian auction clearance rates rebounded last week, according to preliminary data released by CoreLogic earlier today.

A national figure of 76.2% was recorded, up from the final 73% level reported in the prior week. Though lower than the levels seen earlier this year, it was also higher than the 69.5% level reported in the same corresponding week in 2016.

Making the rebound all the more impressive, the result came despite a significant lift in the number of properties being taken to market with 2,376 properties going under the hammer, above the 1,689 level of the previous week.

Yet again, the strength was led by the Sydney and Melbourne markets with preliminary clearance rates of 79.4% and 76.8% reported.

Adelaide and Canberra, at 71.8% and 75.8% respectively, also put in a strong performance.

This table from CoreLogic shows how each individual capital city performed last week.

Source: CoreLogic

While higher than a week earlier, CoreLogic said that it was unclear whether it was driven by a pickup in demand or vendors lowering their reserve prices.

“At face value auction markets are continuing to indicate continued strength in selling conditions across Sydney and Melbourne, however it’s harder to know whether vendors are adjusting their reserve pricing in order to clear their property,” it said.

Suggesting that it may be the latter that drove the increase, Corelogic’s separate capital city home value index fell by 0.5% for the week, led by declines of 0.7%, 0.6% and 0.4% in Melbourne, Perth and Sydney.

Over the past month, prices have now fallen by 0.9% nationally with all mainland state capitals aside from Brisbane logging declines of 1% or more.

Prices in Sydney and Melbourne declined by 1.2% and 1% over that period, trimming their gain over the past 12 months to 12% and 12.9% respectively.

Source: CoreLogic

The group says the final auction clearance rate for the week — released on Thursday — will be important to monitor whether preliminary clearance rates undergo some revision as more data flows through.

Compared to the preliminary figures, final auction clearance rates have a tendency to be revised lower as tardy, often unsuccessful auctions, are reported to the group.

As yet, the group has only received 1,956 results of the 2,376 properties that were taken to auction last week.

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