Sydney and Melbourne's housing markets continue to simmer as clearance rates top 80% again

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Out-of-cycle mortgage rate increases and moves from APRA to limit the proportion of interest-only loans being written by Australian lenders appear to have had no impact on auction clearance rates if the latest figures from CoreLogic are anything to go by.

According to the group, a preliminary capital city auction clearance rate of 78.1% was achieved last week with three capitals — including Sydney and Melbourne — logging rates in excess of 80%.

“Despite auction volumes shifting generally higher over the last few weeks, the weighted average clearance rate has remained relatively consistent, with preliminary results this week showing 78.1% of the 2,121 reported auctions were successful, increasing from the 74.5% final figure last week,” the group said in a statement released on Sunday.

“2,646 properties taken to auction this week, down from 3,171 last week.”

This table from CoreLogic shows how individual capital city markets fared for the week.

Source: CoreLogic

Along with Sydney and Melbourne at 80.7% and 80.6% respectively, Adelaide was the other capital to log a preliminary clearance rate in excess of 80% at 80.6%. Canberra, at 76.3%, also put in a strong showing.

In total, there were 2,646 auctions being monitored by the group last week, with the final reading for the week scheduled to be released on Thursday.

The final reading tends to be revised lower as late, often unsuccessful results, are reported to the group.

In the prior week, a preliminary auction clearance rate of 77.1% was reported, above the final reading of 74.5%. However, even if the final figure is revised lower, as usually the case, it’s still likely to be well above the final 66.6% clearance rate reported for the same corresponding week in 2016.

Later today, CoreLogic will release its capital city house price index for March with another hefty increase expected thanks to ongoing strength in Sydney and Melbourne prices.

“The debate around housing affordability and overheated housing values is about to step up a notch, with CoreLogic set to report another month of solid capital gains for March,” Tim Lawless, head of Asia Pacific at CoreLogic, wrote late last week.

“The preliminary results over the first 28 days of the month indicate capital city dwelling values are likely to rise by approximately 1.4% over the month, with stronger results being recorded in Melbourne and Sydney.”

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