Australian auction clearance rates continue to hover at around 70%, pointing to a slowdown, rather than slump, in price growth from the levels seen earlier this year.
According to CoreLogic, a preliminary clearance rate of 70% was recorded across Australia’s capitals last week, down fractionally on the preliminary figure of 71.1% from the previous week.
The 70% level points to the likelihood that the final clearance rate for the week will fall to the mid-to-high 60% region, maintaining the pattern seen since the start of June.
“The final clearance rate across the combined capital cities has been sitting in the mid-high 60% range since June and it is likely that this will be the case again on Thursday when our final results are published,” said CoreLogic following the release of its preliminary report.
Demonstrating this relationship, clearance rates in the final week of August — initially reported at 71.1% — were subsequently revised down to 68.3%.
This table from CoreLogic shows how individual markets fared last week.
And here’s how they compared to the preliminary clearance rates reported in the previous week.
Melbourne and Sydney’s preliminary clearance rates fell week-on-week, although both were higher compared to final figures released later in the week, said CoreLogic.
“Across Melbourne, preliminary results show that 73.5% of the 839 reported auctions sold this week. There were 976 properties taken to auction across the city, down from 1,124 last week when the final clearance rate was recorded at 72.3%,” it said.
“Sydney was host to 770 auctions this week and a preliminary clearance rate of 70.5% was recorded, rising from 67.4% last week across 832 auctions.”
Of the remaining capitals, preliminary clearance rates in Brisbane, Perth and Tasmania rose from the final figures released a week earlier, while those in Adelaide and Canberra fell.
However, despite the mixed performance during the week, it’s clear that clearance rates in Australia’s southeastern capitals remain far stronger than those in other parts of the country, fitting with price movements reported in CoreLogic’s separate Home Value Index released on Friday.
According to the group, prices in Sydney, Melbourne and Hobart all grew by more than 12% in the year to August, while those in Canberra also rose by 8%.
In comparison, prices increased by 5.2% and 3% in Adelaide and Brisbane, while those in Perth and Darwin fell by 2.8% and 4.2% respectively.
CoreLogic will release updated house price movements for last week later today.
Despite the strong growth house price growth recorded in Sydney and Melbourne over the past 12 months, Tim Lawless, head of research at CoreLogic, said that prices in both cities could begin to fall in the months ahead.
“Historically, a negative shift in home values has followed every growth phase, so it’s reasonable to expect a period of moderate value falls following such a sustained period of strong capital gains,” he says.
“With the Spring selling season about to commence, it will be interesting to monitor the impact of higher inventory levels on the Sydney and Melbourne market, particularly so given evidence of slowing growth conditions accompanied by stock levels already being higher than they were a year ago across both cities.”