There's few signs the weakness in Australia's housing market is easing

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  • Australian auction clearance rates eased slightly last week.
  • The modest decline came despite fewer properties going under the hammer and poor reporting levels. The preliminary 56.0% clearance level is likely to be revised down sharply in the coming days.
  • In the same week a year ago, Australia recorded a final clearance rate of 62.7% from a massive 3,990 auctions held.
  • Median home prices fell across all mainland state capitals except for Adelaide last week, led on this occasion by Brisbane. Prices have fallen across all of these markets in March, driven primarily by continued weakness in Sydney and Melbourne.

Australian auction clearance rates weakened slightly last week despite fewer properties going under the hammer and poor reporting levels.

And home prices are continuing to fall.

According to CoreLogic, Australia’s preliminary combined capital city clearance rate fell to 56.0% last week, down marginally from the initial estimate of 56.1% reported seven days earlier.

CoreLogic

The modest decline came despite fewer homes going under the hammer, declining to 1,669 from 1,894 in the prior week.

Of those auctions held, CoreLogic received results from just 1,160, equating to a reporting rate of 69.5%. That was well below the 74.8% level seen seven days earlier.

Of those results received, 650 homes sold prior to, during or after auction. 510 failed to sell, including 68 properties that never made it to market.

The preliminary clearance rates for homes stood at 55.7% for the week, slightly below the 57.2% preliminary estimate for units across the capitals.

With results from so many auctions yet to be received, it suggests there’ll be a sizable downward revision to the national preliminary estimate when final figures are released on Thursday last week.

Late results tend to be for properties that failed to sell at action.

In the prior week, the preliminary estimate was revised down from 56.1% to show a final clearance level of only 51.4%. Given that reporting rates were significantly weaker on this occasion, a final clearance rate of around 50% appears likely.

Demonstrating just how soft last week’s performance was, in the same corresponding period a year ago, Australia recorded a final combined capitals clearance rate of 62.7% from a substantially larger 3,990 auctions held.

Put bluntly, even with soft market conditions discouraging homeowners to sell their home, including via auction, clearance rates are still very weak compared to the levels seen in prior years.

CoreLogic

Across the capitals, Sydney once again recorded the highest preliminary clearance rate across the country at 62.2%. However, just 60% of results were reported to CoreLogic, pointing to the likelihood of a substantial downward revision to the preliminary figure as late results come in.

Auction activity across Australia’s largest and most expensive city were also well down on normal due to the New South Wales state election held on Saturday.

Melbourne, at 57.0%, recorded the second-highest preliminary clearance rate nationwide behind Sydney, although weaker volumes and a decline in reporting levels also point to a larger than usual downward revision to its final clearance level.

Across the smaller capitals, preliminary clearance rates weakened in Brisbane, Adelaide and Canberra from seven days earlier but rose modestly in Perth.

Demonstrating that higher clearance rates in Sydney and Melbourne, at least in comparison to those seen late last year, aren’t helping to boost home prices, median values in both cities continued to weaken last week, falling by 0.16% and 0.15% respectively, according to CoreLogic’s daily data.

Elsewhere, prices also fell by 0.26% in Brisbane over the week, and by 0.4% in Perth. Adelaide, at 0%, was the only capital to record no change in median values from seven days earlier.

So far in March, median prices in Sydney have now fallen 0.8%, faster than the 0.6% decline seen in Melbourne and 0.4% falls registered in Brisbane and Perth. Adelaide prices have fallen by a smaller 0.2% since the end of February.

March is typically a seasonally strong month for home prices, usually benefiting from fewer listings in late January and February where much of the settlement data is sourced from.

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