CoreLogic reported a softer preliminary clearance rate over the weekend following another rise in listings.
At the combined capital city level, the preliminary clearance rate slid 2.0 percentage points to 72.0% amid a 10.6% jump in listings.
The number of homes auctioned overtook the prior weekend as the busiest since before Easter.
Source: CoreLogic
Melbourne (1,045) had the busiest auction market this weekend, with over 1,000 properties sold at auction, a 24.3% increase over the previous week (841).
With 854 results so far, Melbourne’s preliminary clearance rate (69.9%) fell below 70% for the fourth time in six weeks, falling 2.8% from the previous weekend.
This weekend was Sydney’s second busiest of the year, trailing only the week ending April 2nd (1,017), with 887 homes going under the hammer.
So far, 74.6% of the 690 results obtained have been successful, a -2.9% decrease from the previous week.
The next chart, which plots CoreLogic’s 5-city daily dwelling values index against the combined capital city auction rate shows the market is losing some momentum.
Commenting on this weekend’s results, prominent Sydney real estate agent and auctioneer, Tom Panos, believes the market is approaching a “tipping point” with a big lift in listings likely over Spring:
“We are at a pivotal point in real estate at the moment. We’re on that Tipping Point where stock is starting to fly in. We have got a lot of stock on the market. But this is just the beginning. There’s more to come”.
“I can tell you I am totally booked out and I’ll be booked out right through the year. It’s going to be between 10 and 13 auctions every Saturday right through to probably the middle of December”.
CoreLogic shows that there has been a strong lift in new listings across Sydney and Melbourne, which research director Tim Lawless says contributing to slower house price growth:
Source: CoreLogic“It’s not surprising that house prices in markets like Sydney have decelerated from their very rapid rate of growth because the flow of new listings haven’t been absorbed”, Lawless said last week.
“Sydney’s growth halved from May through to July and we’re not seeing much growth in Melbourne at around 0.5% over the month to date”.
It appears that the delayed impact of the RBA’s 4.0% rate hikes is pushing more properties onto the market.
Households transitioning from ultra-low fixed-rate mortgages of 2% to variable rates above 6% are particularly vulnerable to forced selling.
The ‘positive’ news is that demand is still strong. As a result, auction clearing rates have held relatively firm in the face of rising volumes.
This could change in coming months as more listings hit the market.
