CoreLogic’s latest Quarterly Auction Review analysed the auction clearance rates in the capital cities over the March 2018 quarter.
The report revealed that there had been a 10.2 per cent drop from the previous corresponding period, despite the week ending 25 March recording the highest auction volumes on record, with 3,990 homes taken to auction across the combined capital cities.
Overall, however, auction volumes rose by 1,460 across Australia’s combined capital cities.
When compared to the previous quarter, the clearance rate also rose, from 62.3 per cent in the December quarter to 64.6 per cent in the March quarter.
CoreLogic research analyst Cameron Kusher attributed the year-on-year fall in figures to tightener lending conditions and a softening in home values in Australia’s most populous cities.
“While clearance rates have increased relative to the December 2017 quarter, clearance rates are well down on a year ago. This reflects the much tighter lending conditions now in place and the fact that in the two most auction-centric markets (Sydney and Melbourne) dwelling values are now falling,” Mr Kusher said.
Mr Kusher said that he also expects clearance rates to drop further.
“Weaker auction clearance rates are anticipated to persist, particularly in Sydney and Melbourne, due to tighter lending policies and falling dwelling values,” the analyst said.
Despite the annual reduction, the combined capital city auction clearance rate rose to 64.6 per cent over the March quarter, up by 2.3 per cent from 62.3 per cent in the December quarter.
Melbourne reported the highest clearance rate, rising from 68.1 per cent to 68.4 per cent (9,488 auctions), followed by Canberra (67.9 per cent/808 auctions), Adelaide (65.7 per cent/961 auctions), Sydney (63.6 per cent/7,775 auctions), Tasmania (51 per cent/68 auctions), Brisbane (49 per cent/1,247 auctions) and Perth (34.7 per cent (374 auctions).
The largest reported increase over the March quarter was in Sydney, where auction clearance rates jumped by 5.9 per cent, from 57.7 per cent.
Tasmania and Perth, however, were the only capital cities that reported a decline over the March quarter, dropping by 6.4 per cent and 5.7 per cent, respectively.
Across Australia’s regional markets, Wollongong in NSW was the only market to report a drop in auction clearance rates over the March quarter, while NSW’s Hunter region experienced the largest increase in clearance rates when compared to the previous quarter.
The highest clearance rate across regional markets was in Geelong, Victoria (83.3 per cent), while Queensland’s Gold Coast reported the lowest clearance rate (40.6 per cent) despite having the largest auction volumes across the regions (770).
“Regional markets are holding up somewhat better, but we would still expect some of the recent strength to abate, particularly in the Hunter and Wollongong regions,” Mr Kusher said.
The Melbourne suburb of Carum Downs reported the highest clearance rate (95.2 per cent), while the Melbourne suburb of Reservoir reported the largest auction volumes (149).