SQM Research has released its auction results for last weekend, which came in at just 35.4% from 1,094 scheduled auctions, similar to the 35.9% recorded the prior weekend from 728 auctions.
Commenting on the result, SQM Research managing director Louis Christopher noted on Twitter (X) that “it looks like a floor has been found with the auction clearance rates. But mid-30s for Sydney? That continues to indicate material declines in activity and prices”.
“Perhaps as we have entered into Winter (seasonally a time for less listings); and with the RBA on pause, we might see a drift upwards towards 40%”, Christopher added.
“Then assuming an unchanged economic outlook, clearance rates will fall again into Spring as volumes ramp up, possibly falling below this current floor”.
Louis Christopher is not wrong about “material declines in activity and prices”. Cotality’s daily dwelling values index has declined by 1.0% over the past 28 days, the fastest rate of decline since the early pandemic downturn.
Over the latest quarter, Sydney’s dwelling values have declined by 2.6% according to Cotality.
Given that Sydney is the nation’s most expensive housing market requiring the largest mortgages, it is the most sensitive to the Reserve Bank of Australia’s interest rate tightening.
As a result, Louis Christopher and others forecast that Sydney will experience the sharpest downturn out of all the major markets.
