Preliminary clearance rate lowest since mid-March
Last week, capital city auction activity in Australia remained relatively stable, with a total of 2,972 homes auctioned across the capitals, according to new data from CoreLogic. This figure represented a slight decrease from the previous week's 2,990 auctions. Despite the slight dip, last week's auction numbers were 23.9% higher than the same period last year, indicating a robust market.
While the number of vendors remains high, buyers have become more cautious. The preliminary capital city clearance rate for last week was 65.9%, the lowest since mid-March. With 2,261 results collected so far, the early success rate was 2.1 percentage points lower than the previous week's preliminary rate. It is expected that the final clearance rate will also fall below the decade average once finalised.
Among the major auction markets, Melbourne experienced a mild decline in weekly auction activity, with a 7.0% decrease to 1,311 auctions, CoreLogic reported. On the other hand, Sydney witnessed its busiest auction week of the year, with 1,154 homes auctioned, representing an 8.6% increase from the previous week. Compared to the same period last year, both cities recorded significant increases in auction numbers, with Melbourne up by 39.5% and Sydney by 14.4%. These figures align with a normalisation of stock levels in both cities. Melbourne's total listing levels are now 7.6% above the five-year average, while Sydney's levels are in line with the average.
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The preliminary clearance rate for Sydney remained firm at 68.7%, with 910 results collected so far. In contrast, Melbourne's early success rate dropped by 3.9 percentage points to 64.1%, with 1,013 results collected, according to CoreLogic. Although this week's preliminary results are higher than the final rates seen last year, both cities have experienced a decline in the final clearance rate in recent weeks, indicating a shift in favour of buyers. This rebalancing is also reflected in the stabilisation of the rolling four-week change in CoreLogic Australia's daily Home Value Index (HVI) for both cities.
Smaller capitals
Among the smaller auction capitals, Brisbane had the busiest auction week, with 200 homes auctioned, CoreLogic reported. Adelaide followed with 161 auctions, Canberra with 124, and Perth with 19.
Adelaide and Perth recorded the highest preliminary clearance rates at 76.9%, while Brisbane's rate stood at 61.7%. These cities continue to have listing levels below average, contributing to above-average auction success rates and strong value growth. In contrast, Canberra's preliminary rate was below average at 52.7%, with total listing numbers 15.1% higher than usual for this time of year. None of the three auctions held in Tasmania last week reported successful results, according to CoreLogic.
With a few more weeks of strong auction volumes expected before the festive season slowdown, market participants will closely monitor selling conditions as the spring/early summer selling season draws to a close. Currently, it appears increasingly likely that selling conditions will continue to soften into 2024.
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