- Sydney’s auction clearance rate tumbled below 50% last week. The result was the weakest for this period of the year since 2008.
- Sydney’s median home price has fallen 4.9% over the past 12 months.
- Unlike Sydney, stronger clearance rates were seen most other Australian capitals last week, including Melbourne.
Auction clearance rates are regarded as a fairly good guide to the direction of home prices in the months ahead, especially in Australia’s largest markets, providing an indication on what prospective buyers are willing to pay and at what price vendors are willing to sell.
Right now, the mismatch in expectations in Sydney, Australia’s largest and most expensive property market, is wide. Very wide.
According to final clearance rates released by CoreLogic today, Sydney’s clearance rate tumbled to 46.9% last week, the lowest level since December 2012, a period when auction activity is usually slow ahead of Christmas.
408 properties went under the hammer, down from 552 a week earlier.
For this time of year, the clearance rate was the lowest since 2008, just before the GFC.
Underlining just how fast Sydney’s market has cooled over the past year, in the same corresponding week in 2017, a final clearance rate of 69.2% was recorded.
Tighter lending standards, along with an increase in total property listings, strong supply of newly-constructed home and deterioration in sentiment towards the outlook for prices, largely explain the decline on both clearance rates and prices over the past 12 months.
While Sydney’s auction market was ice cold, there were stronger performances in other capital city markets, including Melbourne whose final clearance rate rose marginally from 56.1% to 56.2%.
Like Melbourne, final clearance rates in all of Australia’s remaining capitals except Brisbane improved from the prior week.
This again points to the likelihood that the recent price divergence between Australia’s largest and smaller capital city markets will likely persist in the period ahead.
Combined, a final combined capital city clearance rate of 52% was achieved last week, down slightly from 52.6% in the first full week of July.
Looking to the week ahead, activity levels across the country look set to remain subdued, reflecting that many parts of the country are in the middle or end of school holidays.
CoreLogic is tracking 1,155 auctions across the capitals. Melbourne, at 569, will host the largest number of auctions, followed by Sydney at 386.
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