Final auction clearance rate rockets to two-year high

Last weekend, CoreLogic released its preliminary auction clearance rates, which revealed the following results:

Yesterday evening, CoreLogic released its final auction results, which reported a 2.6% decline in the final national auction clearance rate to 68.6% – well above the same weekend last year (55.6%) and above last week’s 65.4%:

As you can see, Sydney’s final auction clearance rate was 2.8% lower, whereas Melbourne’s was 2.3% lower. However, both were above 70% and were way above last year’s 52.4% (Sydney) and 58.5% (Melbourne).

The chart below shows the strong bounce in auction clearance rates nationally:

Commenting on the results, CoreLogic noted:

The last reporting week of July sees the final weighted average clearance rate reach its highest level in two years, with 68.6 per cent of capital city homes selling at auction over the week, increasing on the week prior when 65.4 per cent of homes sold. There were 1,124 homes taken to auction last week across the capitals, increasing on the 896 auctions held the week prior, although lower than the 1,536 auctions one year ago.

While figures are suggesting improving conditions with clearance rates tracking higher over each week of the last six weeks, volumes are almost half of what we were seeing over the same period in 2017 when final clearance rates were at a similar level.

Melbourne and Sydney returned final clearance rates above 70 per cent last week, both increasing over the week across a higher volume of auctions.

The below charts plot the trend change in final clearances in Sydney and Melbourne against dwelling value growth:

As you can see, the bounce in clearance rates is pointing to prices rebounding strongly. However, the rebound is likely to be muted given the low volumes and ongoing lack of available credit.

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