Australian Real Estate Auction clearances weak as prices continue to fall

By Unconventional Economist in Australian Property

at 12:10 am on September 10, 2018 | 28 comments

CoreLogic released its auction report yesterday, which reported a small rise in the preliminary national auction clearance rate to 59.1% from 58.2% last weekend (later revised down to 55.0%).
The preliminary clearance rate was also way below the 66.9% recorded in the same weekend of last year:

Auction volumes nationally were 1,907 – below the 2,258 recorded in the same weekend last year:


Once revised the numbers nationally are likely to fall into the mid-50s.

Preliminary clearances in Sydney (-8.0%), Melbourne (-9.4%), Adelaide (-1.4%), Perth (-22.9) and Canberra (-5.8%) were lower than the same weekend last year, whereas Brisbane (+10.6%) was higher.
The table shows the breakdown by houses and units:

Domain’s less comprehensive auction results were similarly weak, again with a large number of unreported auctions:

Economist Stephen Koukoulas (aka ‘The Kouk’) believes there is a “stand-off between buyers and sellers” and that prices will fall another 5% over the coming year:

“The buyers have the whip hand … they’re the ones controlling things,” he said. “The next six to 12 months will certainly be very tough for sellers, they have to adjust their expected sale price lower.”
Sellers are getting the message. Price discounting in Sydney is at its highest levels in more than five years and the city’s median house price has recorded its biggest annual drop since the GFC.
“It’s not good … unless you’re a buyer and prices still have further to run,” Mr Koukoulas said, predicting prices would fall another 5 per cent in the next 12 months.

Indeed, Friday’s housing finance data collapsed, driven by investors, which augers badly for prices: