CoreLogic’s preliminary auction results reported another weak result for Sydney, with only 55.9% of the 898 auctions held over the weekend reported as sold.
When final results are gathered later this week, Sydney’s clearance rate is certain to fall into the low-50s – levels not seen since April 2020 when the nation was gripped in hard lockdown:
The weak result in Sydney dragged the national clearance rate to 59.8% – way below the 75.4% of successful auctions in the same weekend last year.
Sydney’s auction clearance rates have historically been a good leading indicator for price growth, as illustrated below, meaning price falls should accelerate:
Indeed, Sydney dwelling prices began plummeting after the Reserve Bank of Australia (RBA) began its rate hiking cycle in early May with its initial 0.25% rise:
Sydney dwelling values have plummeted 1.3% so far in June to be down 2.9% from their February peak.
With the RBA certain to hike rates aggressively for the foreseeable future, Sydney is staring down the barrel of double-digit price falls in 2022 and further heavy falls in 2023.
How deep the correction goes will obviously depend on the aggressiveness of the RBA’s monetary tightening. But the way it headed, Sydney is facing its biggest housing market bust in generations.