Final auction clearance rates fail to launch

CoreLogic has released the final auction clearance rate for last weekend, which retraced to 62.7%; albeit off volumes that are around half of last year’s levels:

According to CoreLogic:

The capital city final auction clearance rate came in at 61.3% last week, slightly lower than the week prior when 62.7% of properties sold at auction. The lower clearance rate was across a higher volume of auctions with 856 held, up on the 612 held over the week prior. Of the 738 results collected, 12% were withdrawn which was much lower than the 50% seen a few weeks ago. 37.2% of sold results this week reportedly sold prior to the scheduled auction date, well below the results from early April when more than 80% of successful auctions were sold before the event.

SQM Research’s alternative auction series, released earlier this week, was far weaker, with clearance rates in the 40s recorded in Sydney and Melbourne:

Last week, Sydney recorded a final auction clearance rate of 43.1% with mid-week auctions faring better than Saturday results (45.5% verses 42.6%). Sydney volumes rose to 436 properties for the week which is well up on recent weeks. Overall though, clearance rates faltered on the volume. We would regard clearance rates in the low to mid 40s as one where prices are likely weakening.

Melbourne had one of its best weeks since the crisis. A clearance rate for the week of 49.4% was recorded with the mid-week results fairing much better than the Saturday results (56.8% verses 47.5%). Volumes remained low levels at just 231 properties for the week.

The below chart plots CoreLogic’s trend final clearance rate against dwelling value growth, which still points to falling prices:

However, with auction volumes so low, this obviously reduces their reliability as an indicator:

Meanwhile, the number of auctions scheduled for this weekend remains low owing to the Queens Birthday Long Weekend:

According to CoreLogic:

The first week of winter is set to see 618 capital city homes taken to auction, down on the 856 auctions scheduled last week. Due to the Queen’s birthday public holiday this Monday, all states and territories except Qld and WA are welcoming a long weekend, which usually contributes to lower activity over this weekend each year.

Leith van Onselen

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