The first reading of auction clearance rates around the country is out, and while the national results look solid, the initial Sydney result looks weak.
Corelogic reports a preliminary auction clearance rate of 68% in Sydney. Preliminary results are often revised downwards a few points for the final number, so a clearance rate of 65% or lower is possible.
The Sydney preliminary number was dragged lower by a clearance rate of just 40.4% in the city’s South West region. CoreLogic noted that auction successes in other parts of the city remained very strong, with the Eastern suburbs posting 90%.
Nationally, the preliminary clearance rate was 70.7%. “Auction clearance rates have seen a slight improvement across the combined capital cities over the month of July, with the final clearance rate over the last two weeks just falling short of the 70 per cent mark,” CoreLogic said.
Melbourne posted a preliminary clearance rate of 77.2%, following last week’s final number of 73.8%. Brisbane recorded a preliminary clearance rate of 53.4%.
Auction clearances have been trending lower in Sydney lately, although last week the final result climbed back just above 70%. The weakest final number for Sydney this year was 67.7% recorded on June 11.
While the data shows heat clearly coming out of the Sydney market, clearance rates of below 60% on a sustained basis have historically been associated with outright property price falls in the city, so it looks like an ordinary cooling pattern for now.
This chart shows the trend:
And here’s CoreLogic’s commentary on the Sydney result:
In Sydney, 704 properties were taken to auction this week with a preliminary clearance rate of 68.0 per cent. Last week, the final clearance rate for the city was 70.3 per cent across 625 auctions, after sitting below the 70 per cent mark for the previous 6 weeks, so it will be interesting to see what the final clearance rate is like on Thursday. One year ago, 509 Sydney homes were taken to auction and the clearance rate was 78.0 per cent. This week, the performance across Sydney’s individual sub regions was mixed. Across the South West region, where 47 of the 50 results have been reported so far, the preliminary clearance rate was 40.4 per cent, while across the Eastern suburbs (90.0 per cent) and Inner West (81.8 per cent) regions, the success rate of reported auctions was much higher.
Business Insider will have the final clearance numbers as they arrive during the week.