Suddenly, the Australian housing market is starting to look crowded

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Australian auction clearance rates softened last week, according to preliminary data released by CoreLogic on Sunday.

Across the capitals, a national clearance rate of 70.5% was reported, down fractionally on the 71.5% preliminary reading of the previous week.

CoreLogic said the modest decline corresponded with a sharp increase in the number of properties taken to auction.

“The number of homes taken to auction rose to 2,011, compared with 1,857 over the previous week,” the group said. “This was the largest number of auctions held since the last week of June 2017 and approximately one third higher compared with the same week a year ago.”

While still above the final clearance rate of 68.2% reported last week, CoreLogic says final figures for the week — released on Thursday — are likely to fall back to the high 60% region, continuing the pattern seen since the start of June.

“As more results are collected it is expected that the final auction clearance rate will be revised lower to remain within the high 60% range where it has tracked since the first week of June,” it said.

Final clearance rates tend to come in below preliminary figures as tardy, often unsuccessful results, are reported to the group.

Source: CoreLogic

As seen in the table above showing the performance of individual capital city markets, Canberra, at 87%, recorded the strongest preliminary clearance rate last week. Adelaide, at 72.9%, also put in a strong showing.

Of the largest auction markets — Melbourne and Sydney — clearance rates of 71% and 72% were recorded.

The Melbourne result was well below the levels seen in previous weeks, hinting that market conditions are starting to cool after strong period since the end of May.

“It is possible that Melbourne‚Äôs final clearance rate could drop below the 70% mark for the first time since July last year,” CoreLogic said in response to the preliminary result.

Melbourne’s final clearance rate in the previous week stood at 73.9%.

Fitting with the slide in clearance rates, price growth in Melbourne also slowed last week.

Source: CoreLogic

According to CoreLogic, prices grew by 0.1%, outpaced by gains of 0.6%, 0.5% and 0.2% in Adelaide, Sydney and Brisbane. While only one week, that result was a stark turnaround from the trend in recent months when price growth in Melbourne regularly exceeded those in other capital cities.

Over the past month, Adelaide prices grew the fastest of any mainland state capital at 1.8%. Elsewhere prices rose by 0.6% and 0.4% in Melbourne and Sydney but fell 1% and 0.9% in Brisbane and Perth.

From a year earlier, prices nationally grew by 10.6% in average weighted terms, a result largely reflecting strong gains in Melbourne and Sydney.

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