Auction clearance rates in Sydney have fallen to the lowest level in close to two years, coinciding with a sharp deceleration in price growth over the past three months.
According to figures released by CoreLogic, Australia’s largest and most expensive housing market recorded a final clearance rate of 64.2% last week — the lowest level since late 2015.
CoreLogic said the decline followed a sharp increase in the number of properties being taken to auction, lifting to 916 from 826 in the previous week — the highest number since June.
Mirroring softer clearance rates, CoreLogic says that prices in the city have fallen modestly over the course of September.
“The daily movements in the CoreLogic series is suggesting Sydney values trended slightly lower over the first 20 days of September,” said Cameron Kusher, research analyst at CoreLogic, in a note released on Wednesday.
In the three months to August, prices in Sydney grew by just 0.3%, well below the 5% plus levels seen earlier this year.
The slowdown likely reflects a combination of affordability constraints along with measures introduced by Australia’s banking regulator, APRA, to curb the level of investor activity in Australia’s housing market.
Outside of Sydney, and reflecting the steady decline in clearance rates in Australia’s largest city, CoreLogic said that clearance rates nationwide have fallen back from the levels seen one year ago.
Across Australia’s capitals, a combined final clearance rate of 66.7% was recorded last week, down fractionally on the 66.9% level seen one week earlier.
That was also well below the 76.2% level reported in the same corresponding week in 2016, reflecting an increase in the number of properties that were taken to auction.
2,510 properties went under the hammer last week, significantly higher than the 2,149 level of a year earlier.
By individual market, Canberra and Melbourne continued to outperform other capital cities with clearance rates of 71.9% and 71.4% respectively.
On Melbourne, often Australia’s largest auction market on a week-to-week basis, clearance rates fell to 71.4% from 71.8% a week earlier, potentially reflecting an lift in the number of properties being taken to auction.
There were 1,265 auctions held in the city last week, up from 1,111 in the week prior.
Of the other capitals, clearance rates improved in Adelaide, Brisbane and Canberra but softened in Perth.
Looking to the week ahead, CoreLogic is currently tracking 2,592 auctions across Australia’s capitals.
“Sydney is set to see a higher volume of auctions this week, with 983 homes scheduled to go to auction across the city, increasing from last week when 916 auction were held,” the group said.
“In Melbourne auction activity will remain relatively steady week-on-week, with 9 fewer auctions scheduled this week (1,256).”
Of the smaller markets, Adelaide, Canberra, Perth and Tasmania will see activity levels increase while fewer auctions are scheduled to take place in Brisbane.