Clearance rates still suggest Australia's housing market is cooling

A general view of display homes in Sydney, Australia. Photo: Brendon Thorne/ Getty Images.

Australian auction clearance rates edged higher last week after falling to the lowest level in more than a year at the start of September.

According to data released by CoreLogic, a preliminary clearance rate of 70.2% was recorded across Australia’s capitals, up fractionally on the 70% preliminary figure released in the previous week.

Source: CoreLogic

“The combined capital city preliminary clearance rate increased to 70.2% this week, after last week’s revised final clearance rate fell to 66.4%, which was not only the lowest combined capital city clearance rate so far this year but the lowest clearance rate since June 2016 across the combined capitals,” said CoreLogic.

“It will be interesting to see what the final clearance rate looks like on Thursday once the remaining records have been captured.”

Final clearance rates tend to be revised lower as late, often unsuccessful results, are reported to the group.

Source: CoreLogic

Melbourne and Sydney, Australia’s largest and most expensive housing markets, continued to outperform the nation’s other capitals during the week.

“Across Melbourne, preliminary results show that 73.2% of the 938 reported auctions sold this week. There were 1,097 properties taken to auction across the city, up from 976 last week when the final clearance rate was recorded at 71.3%,” CoreLogic said.

“Sydney was host to 810 auctions this week and a preliminary clearance rate of 72.3% was recorded, rising from 65.5% last week across 779 auctions.”

From the same week a year earlier, both cities recorded a lower clearance rate, partially reflecting a higher amount of stock on offer along with a regulator-enforced slowdown in investor activity in these markets.

The pullback in clearance rates has coincided with a moderation in price growth in both Melbourne and Sydney in recent months.

Of the smaller state capitals, preliminary clearance rates rose in Adelaide and Canberra but fell in Brisbane, Perth and Hobart.

Fitting with the gradual decline in clearance rates, CoreLogic said that property price growth over the past year also slowed, thanks largely to a deceleration in Melbourne and Sydney.

Source: CoreLogic

Prices in Melbourne grew by 12.4% over the year, surpassing Sydney for top spot where prices grew 12.3% over the same period. Although still a rapid pace, they have fallen back from the high teen levels seen earlier this year.

Elsewhere prices in Adelaide and Brisbane rose by 5.3% and 2.9% respectively, while those in Perth fell 2.9%.

In average weighted terms, prices nationwide grew by 9.4% over the year, down from the double-digit levels seen just a month ago.

Better reflecting the recent slowdown, prices nationwide have grown by just 0.2% in weighted terms over the past four weeks with a solid increase in Melbourne masking softer outcomes in Australia’s other mainland state capitals, including Sydney.

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