Via Westpac:
Given the intense focus on Australia’s housing markets at the moment and in light of our recent commentary around the best way to interpret auction market results (seehere) we will start putting out short previews each Friday and summary updates the following Monday setting out how results should be viewed.
Key points heading into the March 30-31 weekend –
Last weekend (March 23-24):
- final ‘unadjusted’ clearance rates: Sydney 52.1%; Melbourne 55.1%
- slippage between preliminary and final estimates: Sydney -10.1pts; Melbourne -1.9pts
- ‘withdrawal rates’: Sydney 14.3%; Melbourne 3.7%
- estimated seasonally adjusted clearance rates: Sydney 50.1%; Melbourne 52.8%
- estimated ‘withdrawal adjusted’ clearance rates: Sydney 49.8%; Melbourne 51.5%
This weekend (March 30-31), based on historical averages:
- assumed slippage between prelimimary and final estimates: Sydney -5.5pts; Melbourne -1.5pts
- seasonal adjustment: Sydney -2ppts; Melbourne -2.3ppts
- ‘withdrawal rate’ adjustment, deduct difference between observed withdrawal rate and: Sydney 14%; Melbourne 3%
As discussed in previous commentary, ‘withdrawal adjusted’ clearance rates in the 50-55% range are broadly consistent with stablising prices. If withdrawals return to normal, this would be consistent with Sydney preliminary clearance rates in the 57.5-62.5% range and Melbourne preliminary clearance rates in the 53.8-58.8% range.
However, it should also be noted that the slippage between preliminary and final auction clearance rates has been significantly higher in the Sydney market in recent weeks, around 9pts vs the 5.5pt average referred to above. That suggests preliminary estimates for Sydney should be treated with extra caution at the moment.
