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Combined capital city preliminary auction clearance rate rises as volumes remain steady

There were 2,077 homes originally scheduled to go to auction this week across the combined capital cities, however this has revised down to 1,806 auctions as a portion are rescheduled to a later date. Of the 1,466 results collected so far, which equates to an 81.2% preliminary collection rate, 79.2% were sold results. This week’s preliminary clearance rate is higher than last week’s 74.8% preliminary clearance rate, which later revised down to 73% at final results on Wednesday. Final results last week saw a total 1,728 auctions held. One year ago, a lower 1,154 auctions took place with a final clearance rate of 58.7%.

Capital City Auction Statistics (Preliminary)

In Melbourne, 679 homes were taken to auction this week, recording a preliminary auction clearance rate of 77.1%. This was considerably higher than the 71.9% preliminary figure last week when the city was in lockdown. The final clearance rate came in at 70.8% last week across 772 auctions. One year ago, 357 auctions took place and a final auction clearance rate of 55.1% was recorded.

Weekly Clearance Rate, Combined Capital Cities

Sydney has remained rather resilient despite the prolonged lockdown currently faced. The city has seen over 500 properties taken to auction each week. This week 685 homes proceeded to auction, returning a preliminary auction clearance rate of 80.8%.This week’s results are an improvement on the 74.8% preliminary clearance rate recorded last week. The final results last week came in at 72.8% across 585 auctions. Of the results collected so far this week, 14% were withdrawn, which is lower than last week’s final of 21%. Of the sold results, 64.5% were sold prior the auction event this week, which is higher than the 58.1% of sold priors last week.

Canberra was the best performing of the smaller auction markets this week, with a preliminary auction clearance rate of 92.1%. Following this was Adelaide with a preliminary clearance rate of 82.5%.

Sub-region auction statistics

Australian housing values increased a further 1.6% in July, according to CoreLogic’s national home value index. The latest rise takes housing values 14.1% higher over the first seven months of the year and 16.1% higher over the past twelve months.

CoreLogic's research director, Tim Lawless, described the market as strong, but losing steam. “The 16.1% lift in national housing values over the past year is the fastest pace of annual growth since February 2004, however the monthly growth rate has been trending lower since March this year when the national index rose 2.8%.”

Mr Lawless attributes the lower rate of growth in housing values to several factors. “With dwelling values rising more in a month than incomes are rising in a year, housing is moving out of reach for many members of the community. Along with declining home affordability, much of the earlier COVID related fiscal support (particularly fiscal support related to housing) has expired. It is however, encouraging to see additional measures being rolled out for households and businesses as the latest COVID outbreak worsens.

“On the flip side, demand is being stocked by record low mortgage rates and the prospect that interest rates will remain low for an extended period of time. Dwelling sales are tracking approximately 40% above the five-year average while active listings remain about -26% below the five-year average. The mismatch between demand and advertised supply remains a key factor placing upwards pressure on housing prices,” Mr Lawless said.

Index results as at July 31, 2021

The pace of dwelling price appreciation has slowed across each of the capital cities. Sydney has recorded the sharpest reduction, with the monthly capital gain falling from 3.7% in March to 2.0% in July. According to Mr Lawless, “Sydney is the most expensive capital city by some margin and it has also been the city where values have risen the most over the first seven months of the year. Worsening affordability is likely a key contributing factor in the slowdown here, along with the negative impact on consumer sentiment as the city moves through an extended lockdown period.”

Although the pace of growth has slowed, housing values continue to rise at a rate that is well above average across most areas of the country.

The previously stronger performance across regional markets relative to the capital cities has normalised through 2021. After the combined regional areas of Australia recorded stronger housing market conditions through the second half of 2020, the first seven months of 2021 shows an almost equal rate of growth in dwelling values across the combined regional and capital markets with values up 14.5% and 14.0% respectively.

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CoreLogic Australia

CoreLogic Australia

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