The bottom continues to fall out of Australia’s property market, with Cotality’s preliminary auction results hitting a new cyclical low this weekend: only 54.5% of auctions sold, the lowest preliminary clearance rate since April 2020.
Source: Cotality
The weak result came alongside a rise in auction volume, with 2,681 homes going under the hammer, a 15.2% rise in volume from a week ago but 8.1% lower than the same week last year.
Melbourne hosted the most auctions, with 1,264 homes taken to market, a 20.3% rise on last week. 58.1% of auctions have reported a positive result based on results collected so far, down from 60.2% last week (revised down to 53.3% once finalised).
997 auctions were held in Sydney, a 23.9% increase on the number held a week ago. The preliminary clearance rate slipped lower to 51.8%, down from 56.9% the week prior (49.3% on finalised numbers).
This week’s preliminary clearance rate for Sydney was the second lowest so far this year, after the 49.2% result recorded over the week of the federal budget announcement. Prior to that, Sydney’s clearance rate hadn’t been this low since the early months of COVID in April 2020.
Brisbane was the busiest of the smaller capitals, with 201 homes auctioned, returning a preliminary clearance rate of 43.3%, the lowest early result since April 2023.
The collapse in auction clearance rates comes amid a rise in new listings, which are tracking 8.9% above the same time last year, according to Cotality:
Source: Cotality
The weak demand and rising supply continue to place downward pressure on dwelling values, with Cotality’s daily dwelling values index declining by 0.2% over the past 28 days at the 5-city aggregate level, driven by 0.8% falls, respectively, in Sydney and Melbourne:
The combination of overvaluation, rising interest rates, worsening sentiment, and the federal budget’s tax changes to negative gearing and capital gains taxes has combined to create the ‘perfect storm’ for the housing market.
This is why I wholeheartedly believe that Australian housing is facing its biggest price decline in 40 years.
Source: Cotality
I discussed the current state of the housing market in my latest Macro & the Mortgage Podcast with Catherine Cashmore from Landcycle Investor:
