Despite being the biggest housing markets in Australia and reflecting large market volumes, auction clearance rates in Sydney and Melbourne continuing to report results under 70 per cent.
Last week Sydney was revealed to have outperformed other capital cities in Australia, with auction volumes increase from 1,061 to 1,153.
The 3409 scheduled auctions last week returned a preliminary clearance rate of 66.9 per cent, although CoreLogic said that the combined capital city clearance rate tends to revise down so the final clearance rate on Thursday will likely be in the mid to low 60 per cent range for the sixth week in a row.
The data provider reported that the auction clearance rate in Sydney have been at their lowest levels since 2012 over recent weeks and have been on a steady decline throughout 2017.
“If you exclude the low volumes in January, last week’s auction clearance rate of 54.8 per cent was the cities lowest clearance rate since December 2015," CoreLogic said.
Clearance rates were lower than a year ago and were also slightly lower than they were two years ago, when APRA's first round of macroprudential policies were significantly impacting Sydney housing demand.
“If the previous round of macroprudential policies is a guide we can expect a further weakening of clearance rates over the coming weeks."
Melbourne’s clearance rate of 66.9 per cent last week was the lowest since July of last year.
“The higher number of properties being taken to auction is likely to be having some impact on the weaker clearance rates this year relative to last however, volumes are also much higher currently than they were in 2013, 2014 and 2015 a time at which clearance rates were fairly similar to current levels. Given this, clearance rates are actually holding up quite well considering much higher volumes of auctions.”
Findings were clear that Sydney and Melbourne clearance rates have softened, with Sydney rates mimicking recent declines in dwelling values while Melbourne’s auction clearance rates slowed alongside a moderate slowdown in value growth.
"Keep in mind that clearance rates typically soften through Spring as auction volumes increase so we may have to wait until 2018 to truly understand what is driving the apparent weakness in the Melbourne auction market," CoreLogic reported.
There were 3,409 homes taken to auction across the combined capital cities this week, with a total of 3,398 homes taken to auction over the same week last year, and a clearance rate of 73 per cent was recorded.