Auction action in slump

Melbourne, Sydney drag down clearance rate

THE capital city house auction clearance rate looks likely to remain below 45 per cent for the third week running, with the market subdued despite more properties going under the hammer.

CoreLogic’s weekly property market indicator shows there were nearly 400 extra homes put up for auction across the capital cities last week, including 300 more in Melbourne alone, but the national total of 2735 was still about 600 fewer than the same time last year.

CoreLogic also said the preliminary Close Change clearance rate of 45.5 per cent for the week was likely to be revised lower, following a rate of 43.3 per cent the previous week, and 60.9 per cent the same time last year.

Analysts said results in Melbourne and Sydney continued to drag on overall figures, with other states seeing a slight lift.

“Across the smaller auction markets, preliminary results show an improvement in clearance rates across Adelaide, Brisbane, Canberra and Perth,” CoreLogic said in its report.

Melbourne hosted 1411 house auctions last week, with preliminary results showing a clearance rate of 43.5 per cent, down from the previous week’s 46.2 per cent.

There were 874 auctions held in Sydney, up from 844 the previous week, with preliminary results showing 48.5 per cent were successful, up from 42.1 per cent.

Meanwhile, Adelaide had slightly fewer properties sold for the week but the clearance rate jumped to 64.4 per cent – almost in line with the same time last year.

Both clearance rate and volumes rose in Brisbane, with close to 50 extra homes up for sale and an improved clearance rate of 40.3 per cent. Canberra and Perth also saw more homes under the hammer and a better clearance rate.

The data comes after revelations that new homes are the smallest they’ve been since 1996, according to a study commissioned by CommSec.

A rise in the number of apartments being built has contributed to the falling home size, CommSec says.

Meanwhile, the number of home loan approvals for owner occupiers fell 1.0 per cent in September, in line with market expectations amid sagging property prices.