Ahead of the Reserve Bank’s interest rate meeting on Tuesday, widely expected to lift the official cash rate by 0.25%, Australia’s auction market weakened this weekend, posting the lowest preliminary clearance rate in 10 weeks.
According to Cotality, the preliminary clearance rate came in at 50.3%, down from 54.0% last week, which was revised down to 49.1% on final figures.
Source: Cotality
Auction volumes were negatively impacted by the AFL Grand Final. Across the combined capital cities, 1,428 auctions were held this week, a 22.4% drop from a week ago and 17.7% down from the same week last year.
Sydney held the most auctions this week, with 790 homes going under the hammer, a solid 39% rise on last week’s volume but down 32% from a year ago. This was the busiest week of auctions across Sydney since the last week of May (977).
However, Sydney’s preliminary clearance rate fell by 63 basis points this week, coming in at 53.6%, the lowest result in eight weeks.
Melbourne hosted just 286 auctions this week, 69% fewer than a week ago but 28% more than the week of the Grand Final last year. Melbourne’s preliminary clearance rate fell sharply, from 56.3% a week ago to 48.8% this week (-7.5 percentage points), to be the lowest preliminary clearance rate since the first week of September in 2021.
Brisbane’s preliminary clearance rate was 42.6%, up 5.1 percentage points from a week ago. However, it has held below 50% over 18 of the past 19 weeks.
The slump in the nation’s auction market is reflected in dwelling values, which have fallen by 1.3% across the five largest capital cities over the past month, led by Brisbane, Sydney, and Adelaide:
The current decline from peak across the five major capital cities is now -5.8%, led by Sydney (-8.3%) and Melbourne (-7.2%):
With financial markets now tipping another two to three interest rate hikes from the Reserve Bank, Australia faces its largest house price correction in more than 40 years.
