Sydney and Melbourne are currently experiencing housing corrections, with both markets recording price falls of more than 2% over the past quarter.
The price declines are reflected in both cities’ auction markets, where clearance rates have fallen to their lowest levels in years.
Sydney’s final auction clearance rate in May fell to 49%, the lowest level since April 2020.
Melbourne’s auction clearance rate in May fell to 54%, the lowest level since July 2022:
The auction downturn continued this weekend, with Cotality recording a national preliminary clearance rate of 51.1%, the lowest outcome since the week ending 26 April 2020.
Source: Cotality
Sydney’s preliminary clearance rate rose slightly this week, from 51.8% a week ago (revised lower to 46.5% once finalised) to 52.9%, which was the third lowest preliminary clearance rate this year.
Melbourne recorded a preliminary clearance rate of 52.3% this weekend, a sharp decline from the week prior (58.1%, which was revised down to 51.9% once finalised) and the lowest preliminary clearance rate since June 2021.
Brisbane’s preliminary clearance rate of 31.9% was the lowest since May 2020.
As illustrated above, auction clearance rates have historically been a strong leading indicator of dwelling price growth.
Therefore, the falling auction clearance rates suggest that values will continue to fall.
