- Sydney’s preliminary auction clearance rate jumped sharply last week, rebounding after hitting a decade-low in early July.
- Clearance rates also improved in all remaining capital city markets, helping to lift the nationwide measure despite a slight uptick in the number of homes going under the hammer.
- CoreLogic will release data on weekly price movements and listing levels later today.
While it may have been driven by weak volumes and poor reporting levels, auction clearance rates in Sydney improved sharply last week, rebounding after tumbling to the lowest level since the GFC in the early July.
According to CoreLogic, a preliminary clearance rate of 61.3% was achieved last week, well above the 52.4% preliminary estimate offered seven days earlier.
While a sharp turnaround, auction volumes were low with just 400 properties going under the hammer, down from 408 one week earlier.
CoreLogic received results from just 287 of the 400 auctions held. Within that figure, 176 homes sold prior to, at or after auction while 111 properties went uncleared, including 45 properties that were pulled prior to going to market.
A total 113 results were not received, similar to the levels of a week earlier.
Given the large number of unreported results, it points to the likelihood that Sydney’s final clearance rate will be revised substantially lower when CoreLogic releases updated figures on Thursday.
However, even with the likelihood of a steep downward revision, it’s unlikely to be as low as the 46.9% final level reported in the prior week.
Like Sydney, low volumes also helped preliminary clearance rates improve in all other capital city markets, including Melbourne, Australia’s busiest auction market.
Melbourne’s preliminary clearance rate rose to 62.3%, up from 60% in the prior week. Auction volumes were actually higher, lifting to 612 from 559 seven days earlier.
Compared to Sydney, reporting levels were also stronger with results from 507 received by CoreLogic.
Preliminary clearance rates also improved in Brisbane, Adelaide Canberra and Perth.
Unsurprisingly, the preliminary combined capital city clearance rate lifted to 60.6%, up from 55.8% one week earlier. Clearance rates for units drove the increase, lifting to 67.4%, above the 57.4% level for houses.
Largely reflecting the rebound in activity in Melbourne, 1,246 auctions took place across the country, up from 1,178 in early July.
While a steep improvement across the country, as seen in the chart below from CoreLogic showing the trend in nationwide clearance rates over the past decade, the result appears at odds with the theme seen in recent months, underlining the need for caution.
It could be the start of a turnaround in clearance rates, but then again, it might not be.
Even with the modest lift in auction volumes last week, they still remain well below the levels typically seen in autumn and spring when activity levels increase sharply.
They also remain well below the levels seen in the same period last year when 1,748 homes went under the hammer, delivering a final clearance rate of 69.9%.
Given the likelihood that volumes will once again increase in spring, it’s likely we won’t get a true read on the mismatch between vendor and buyer price expectations until supply levels begin to pickup.
Following the preliminary auction clearance rates update, CoreLogic will release a raft of other property market indicators later today including weekly price movements from Australia’s five mainland state capitals as well as total listing levels.
In recent months, prices have been falling modestly — led by Melbourne and Sydney — as higher property listings in those cities offset declining volumes in Australia’s smaller capitals.
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