Australian auction clearance rates continued to improve last week despite higher levels of stock hitting the market, adding to tentative evidence that they may have bottomed in late 2017.
According to preliminary data released by CoreLogic, a national clearance rate of nearly 70% was recorded last week, up noticeably on the figures released one week earlier.
“A preliminary auction clearance rate of 69.1% was recorded across the combined capital cities as auction activity ramped up this week with a total of 1,963 homes taken to auction, increasing from the 1,490 auctions held last week when [a final clearance rate of 63.7% was reported],” the group said.
Despite the increase in auctions held, the preliminary clearance rate was also higher than the 67.7% level reported one week earlier.
CoreLogic received results from 1,535 of the 1,963 auctions that took place, hinting that the preliminary figure will likely be revised lower as tardy, often unsuccessful outcomes, trickle in to the group.
As seen in the table below from CoreLogic, the national improvement was led by a somewhat unlikely source, at least compared to recent trends: Sydney, Australia’s largest and most expensive housing market.
“Sydney’s preliminary clearance rate was recorded at 74.3% across 718 scheduled auctions, well above the trend over the final quarter of 2017 where auction clearance rates were tracking in the low 50% range,” CoreLogic said.
That result was stronger than the 68.7% level reported a week where 517 properties went under the hammer.
Based off recent evidence, it suggests that clearance rates in Sydney may have already bottomed, contributing to the broader national improvement in weighted terms.
Ensuring that the national average stood at just shy of 70% for the week, Melbourne recorded a preliminary clearance rate of 70.7%, an outcome slightly weaker than the 72.5% level reported a week earlier.
Like Sydney, more properties were put up for sale during the week, rising to 923 from 621 in early February.
“This will be the first week in some time where Sydney has outperformed Melbourne,” CoreLogic said.
“However, as final results are collected, it will be interesting to see how this revises,” it added, referring to the tendency for preliminary figures to be revised lower when final figures are released.
Outside of Sydney and Melbourne, all other capitals reported weaker preliminary figures than a week earlier.
This table from CoreLogic looks at the performance of individual markets in more granular detail, looking at the performance of both housing and apartment clearance rates as well as median prices.
With national clearance rates continuing to improve, it will be interesting to see whether that reflects stronger buyer demand or more realistic vendor expectations given recent softness in prices.
Markets will get further clarification on that front later today with CoreLogic set to release weekly price data for each of Australia’s five mainland state capitals.
In recent months prices have been flat to lower, led by ongoing declines in Sydney.