Capital city clearance rate continues nosedive

According to these latest figures, there were 2,526 homes taken to auction across the nation’s capitals between 13 June and 19 June. 

The number is substantial compared to the preceding week, which reported a distinct drop in the auctions due to the Queen’s birthday long weekend. 

However, according to the latest preliminary data, like in the preceding week, almost half of these were not successful, with only 57.8 per cent of auctions being considered successful over the seven-day period – the lowest clearance rate reported for 2022.  

Compared to this time last year, last week’s number of auctions marked a 126 increase. However, last year’s clearance was reportedly 74.1 per cent. 

Driving this figure were Brisbane (52.2 per cent), Sydney (55.4 per cent) and Melbourne (57.9 per cent), with all three cities reporting clearance rates below 60 per cent. 

According to CoreLogic, this is the NSW capital’s lowest preliminary clearance rate since April 2020.

Adelaide reported the highest preliminary clearance rates at 70 per cent, which was followed by Canberra at 64 per cent. 

No city reported a higher clearance rate than the same time last year. 

All cities also reported a decrease in the number of auctions compared to last year excluding Melbourne, which boosted from 788 to 1,264 year-on-year, and Adelaide, which grew by 37 to 179. 

These latest results continued what has been a gradual but persistent decline in clearance rates across the country over recent months.

However, additional data from CoreLogic further suggests Australia’s property market – particularly those in capital cities – is beginning to cool. 

According to CoreLogic’s latest Pain & Gain report, which analysed roughly 106,000 property resales over the March quarter, the median gain was $290,000 while the median loss was $33,000. 

Yet, the report also noted that the rate of profit-making sales was reportedly 93.7 per cent during the March quarter. 

This latest figure is only a 30-bp drop from the December 2021 quarter. But it also marked the first drop in almost two years, with this rate rising persistently since the September 2020 quarter. 

Australia’s capital cities were said to be the driving factor in this fall of profitable resales, dropping by 60 bps to hit 93.3 per cent over the period.

Regional areas, by comparison, grew by 10 bps to hit 94.2 per cent. 

CoreLogic head of research Eliza Owen commented that these figures “align with other key indicators” including the lift in interest rates and the slowing growth rate of values. 

Data released by CoreLogic earlier this month suggested that Australia’s housing boom had hit the brakes, with monthly value growth reporting its first loss since 2020.

Looking forward, Ms Owen added that rises in the cash rate will likely reduce the flow of credit towards housing, in turn impacting both prices and profitability.

“However, it is worth noting that price gains through the current housing market upswing have been very strong,” she added. 

According to a separate PropTrack analysis, housing values are 35 per cent higher than they were since the start of COVID-19 pandemic.

“It may only be recent buyers who will take a loss when selling compared to those who purchased before the upswing,” it said.

“Even in a declining market the extent of Australia’s loss-making sales will largely be in line with future capital growth trends.” 

[Related: Housing values sink for 1st time since 2020]