Tumbling auction clearances signal steeper house price falls

CoreLogic has released its final auction results for last weekend, with the lowest capital city clearance rate of 2022 recorded and Sydney and Melbourne clearance rates bombing into the 50s:

CoreLogic auction results

Nationally, a final clearance rate of 61.8% was recorded. Melbourne’s clearance rate (59.8%) fell to its lowest level since mid-September 2021, whereas Sydney (55.3%) recorded its lowest clearance rate since mid-January:

With the RBA announcing interest rate rises last week, the combined capital city clearance rate fell to its lowest rate of the year to date, with 61.8% of auctions recording a successful result…

Melbourne’s clearance rate slipped below 60% for the first time since mid-September (58.5%), when Melbourne was in COVID lockdown, with 59.8% of auctions held last week reporting a successful result…

Sydney’s clearance rate fell to its lowest point since mid-January (54.9%) with 55.3% of auctions held last week reporting a successful result. At the same time, Sydney’s withdrawal rate (21.8%) rose to its highest rate since mid-December 2021 (22.3%) suggesting less  confidence amongst sellers.

Historically, auction clearance rates have been a useful leading indicator for price growth. Thus, the tanking clearance rate across Sydney and Melbourne points to further price falls:

Sydney auction clearance rate Melbourne auction clearance rate

This weekend, 2,931 homes are set to go under the hammer, up 42.4% compared to the previous week and the highest volumes since the pre-Easter spike.

Both Melbourne (1,288) and Sydney (1,001) have a huge volume of auctions scheduled, which should put further downward pressure on prices.

Unconventional Economist

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