Auction clearance rates hit a hurdle
Economist says 'rate increase likely contributed to the weaker result, as buyers faced reduced borrowing capacity'.
THE preliminary auction clearance rates for the combined capital cities took a sharp decline last week, according to property data firm Cotality.
The clearance rate fell to 48.2 per cent, the lowest result since the week ending June 21 (47.4 per cent) and the second-lowest preliminary clearance rate so far this year.
“Last week’s cash rate increase likely contributed to the weaker result, as prospective buyers faced reduced borrowing capacity and subdued confidence,” said Annabelle Mezieres, an economist with Cotality.
“Lower clearance rates in Brisbane, Adelaide and Canberra brought the combined result down.
“Brisbane’s preliminary clearance rate was 25.6 per cent, Adelaide’s 41.5 per cent and Canberra’s 41.7 per cent”.
In Sydney and Melbourne, preliminary clearance rates were at 55.7 per cent and 50.6 per cent respectively, Mezieres said.
Auction volumes in Melbourne rose 136 per cent to 670 after the Grand Final long weekend kept numbers low the previous week.
“Compared with a year ago, they were 42.4 per cent lower,” Mezieres said.
“The preliminary clearance rate was 50.6 per cent, up 1.9 percentage points on Grand Final week. Over the first five weeks of spring, it averaged 55.4 per cent, matching the winter average.”
More than half of Sydney’s auctions were successful, with the preliminary clearance rate rising 2.1 percentage points to 55.7 per cent.
“The long weekend reduced auction volumes to 304, a fall of 61 per cent from the week before. Auction volumes were also 40.5 per cent below the level of a year earlier,” she said.
A decline of 16.9 percentage points left Brisbane’s preliminary clearance rate at 25.6 per cent.
“This was the third time this year that it has fallen within the 20 per cent range,” Mezieres said.
“Auction volumes were largely unaffected by the long weekend, with 139 auctions held compared with 140 in the previous week. Against the corresponding week last year, the number of auctions was 6.1 per cent lower.”
Adelaide held 69 auctions, 32 per cent fewer than the previous week but 6.2 per cent more than the same week last year.
“Its preliminary clearance rate of 41.5 per cent was the fourth-lowest result this year and below the spring average to date of 45.8 per cent,” Mezieres said.
“The largest annual fall in auction volumes of any capital was in Canberra, where the 31 auctions held were 46 per cent fewer than the same week last year. Canberra’s preliminary clearance rate dropped 12.2 points to 41.7 per cent.”
