Whether measured by auction clearance rates or price growth, Australia’s housing market is starting to slow down.
But, as yet, it’s nothing more sinister than that.
According to data released by CoreLogic today, a preliminary clearance rate of 71.7% was recorded across Australia’s capital cities last week, marginally higher than the 70.5% preliminary reading reported one week earlier.
The preliminary reading points to the likelihood that the final clearance rate for the week, released on Thursday, will sit in the high 60% region, continuing the pattern seen since the start of June.
The final clearance rate for the week ending August 13 stood at 67.5%.
After recording its first sub-70% reading since July last year, Melbourne’s high-flying housing market returned to form last week with a preliminary clearance rate of 77.7%, the highest of all Australian capitals.
Sydney, at 70.8%, also put in a reasonable showing, although it still remains well below the levels seen at the start of 2017.
Both cities recorded final clearance rates of 69.8% and 67.6% in the previous week.
Of the smaller capitals, clearance rates improved week-on-week in Brisbane, Perth and Hobart, but fell in Adelaide and Canberra.
CoreLogic said that auction volumes were almost unchanged from a week earlier, although they remained significantly higher than the same period a year earlier.
“There were 2,041 capital city auctions this week, virtually unchanged from last week’s 2,040 auctions as well as being higher than the 1,795 auctions held one year ago,” the group said, adding that “volumes continue to track higher than what was seen over the corresponding July-August period last year”.
In Melbourne and Sydney, Australia’s largest auction markets, volumes increased in Melbourne but fell in Sydney compared to a week earlier.
Reflecting the trends across individual markets, along with those from a broader national perspective, CoreLogic said that property prices put in a mixed performance over the week.
According to the group’s Capital City Home Value Index, prices increased by 0.2% nationally last week, led by Adelaide where they increased by 0.5%. Perth prices also increased by 0.4%, while those in Brisbane fell 0.1%.
Mirroring the trends in clearance rates, prices in Melbourne added 0.4%, double the increase recorded in Sydney.
Over the past four weeks, prices in Adelaide, Melbourne and Sydney increased by 1.8%, 0.9% and 0.6% respectively, offsetting declines of 0.5% and 0.3% in Brisbane and Perth.
In average weighted terms, prices across Australia’s mainland state capitals grew by 0.6% over the same period, hinting that we’re unlikely to see a repeat of the 3.1% surge reported in July.
But with more than a week to go in August, so there’s still time for the market to surprise us yet again.
With national clearance rates continuing to print in the high 60% region, down from the levels seen in early 2017, annual price growth continues to moderate.
According to CoreLogic, prices have grown by 10.8% over the past year in weighted average terms, largely reflecting strong price growth in Melbourne and Sydney at the start of the year.
Prices in Melbourne grew by 16.5%, outpacing a 12.2% lift in Sydney. Both remain below the levels reported in the first three months of the year, especially in Sydney.
Outside of Australia’s largest state capitals, price growth remains benign, increasing by 4.2% or less over the past year.
Recent analysis from UBS found that a national clearance rate of around 70% has historically led to annual price growth of around 10% in the CoreLogic house price series.