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 are now providing short previews each Friday and summary updates the following Monday setting out how results should be viewed.
Key points heading into the May 4-5 weekend –
Last weekend (April 27-28):
- final ‘unadjusted’ clearance rates: Sydney 52.4%; Melbourne 53.6%
- slippage between preliminary and final estimates: Sydney -4.7pts; Melbourne -2.1pts
- ‘withdrawal rates’: Sydney 18.6%; Melbourne 5.6%
- estimated seasonally adjusted clearance rates: Sydney 51.5%; Melbourne 52.8%
- estimated ‘withdrawal adjusted’ clearance rates: Sydney 46.9%; Melbourne 51.6%
This weekend (May 4-5), based on historical averages:
- assumed slippage between prelimimary and final estimates: Sydney -5.5pts; Melbourne -1.5pts
- seasonal adjustment: Sydney -0.9ppts; Melbourne -0.8ppts
- ‘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. While the most recent weekly results showed a weak read on withdrawal rates, these had been improving over the year to date with the April 27-28 weekend results likely to be less representative due to low levels of activity around the Easter holiday period. Early reports from CoreLogic suggest activity will return to normal this week but remain at relatively low levels by historical standards.
All figures are based on preliminary and final auction results provided by CoreLogic.
