CoreLogic’s auction results for July are out, with Australia recording an average final clearance rate of just 53% over the month – the worst result since the height of the pandemic in April 2020 (34%).
Sydney’s average final auction clearance rate bombed to 52% in July, whereas Melbourne’s tanked to 54%:
Auction clearance rates crashed in July.
As regular readers know, auction clearance rates have traditionally been a strong leading indicator for house prices across Sydney and Melbourne, which are the nation’s auction capitals.
Both cities are telling the same story, with the collapse in their respective clearance rates pointing to further house prices falls:
Auction clearances point to house price falls.
Mortgage commitments are telling a similar story, with the collapse in mortgage demand across Sydney and Melbourne also pointing to further declines in dwelling values:
Mortgage commitments also point to house price falls.
The above is further evidence that “fear of overpaying” or FOOP has taken over from “fear of missing out” or FOMO. Buyers are now choosing to remain on the sidelines as they expect house prices to fall.
The situation will persist so long as the Reserve Bank continues to hike interest rates.
