Helped by sparse listings and record low interest rates, Australian capital city auction clearance rates continued to strengthen last week.
According to figures released by CoreLogic earlier today, a preliminary auction clearance rate of 78.4% was reported across Australia’s capital cities last week, leaving it at the highest level seen so far in 2016.
It was above the 74.5% final clearance rate reported in the previous week.
There were 1,858 auctions held nationally during the week, below the 2,297 level seen in the same week of 2016. CoreLogic will release finalised figures on Thursday, capturing results not yet received. It has a tendency to be revised lower compared to the preliminary result.
As shown in the table below from CoreLogic, the strength in the national figures was yet again powered by Sydney and Melbourne, the largest and most expensive housing markets in the country. They recorded preliminary clearance rates of 83.9% and 79.3% respectively, albeit on reduced turnover levels.
Suggesting that the strength in those markets may be spreading to other parts of the country, Adelaide and Canberra also recorded figures in excess of 75%.
Reflective of strengthening clearance rates in Sydney and Melbourne, houses prices in both cities also increased, logging gains of 0.4% and 0.2% respectively over the same period. Over the past month CoreLogic’s Daily Home Value Index reports that prices in Sydney have grown 1.5%, slightly outpacing those in Melbourne which grew 1.3%.
This table from CoreLogic has all the details.
Despite continued price gains and the strength in clearance rates seen recently, analysts at Macquarie Wealth Management says that low turnover in property sales — including sales by private treaty and auction — suggests that house prices are likely to fall in the months ahead.
“Turnover of existing stock has declined in 2016 despite a period of solid price growth. The change in turnover has historically been a strong leading indicator of dwelling price growth with a ~3 month lead time” Macquarie wrote in a research note released on Monday.
“High-frequency housing market indicators have historically and continue to act as strong leading indicators of dwelling price growth”.
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