The weekend of 8-9 August suggested the nation’s housing market might be stabilising after the national auction clearance rate hit a 12-week high of 51.4%, following 10 consecutive weeks in the 40s.
Auctioneers and agents hoped we had hit the bottom and that price declines would soon stabilise.
Alas, the hopes were short-lived, with Cotality reporting that last weekend’s final auction clearance rate once again fell back into the 40s, with Sydney especially weak:
Source: Cotality
The decline in the final clearance rate came as auction volumes were also 33.6% below the same time last year.
Thus, the result was unambiguously weak and points to a market where both buyer and seller sentiment have eroded.
Meanwhile, the house price correction continues to roll on. Cotality’s daily dwelling values index is reporting sharp falls at the 5-city aggregate level, with all major capitals declining.
Over the month to 21 August, dwelling values have fallen by 1.09% across the five major capital city markets, led by Sydney (-1.57) and Melbourne (-1.18%), with Brisbane (-0.60%), Adelaide (-0.61%), and Perth (-0.34%) also recording solid falls.
The decline from peak at the 5-city aggregate levels has also steepened to 3.6%, with heavy losses recorded in Sydney (-6.3%) and Melbourne (-5.9%) and smaller declines of close to 1% recorded across the other major markets:
I am holding firmly to my view that Australia will record its steepest house price correction in modern history, eclipsing the 8.2% decline recorded between 2017 and 2019, which was the greatest in 40 years.
Source: Cotality
It will be interesting to see what this weekend’s auctions deliver, which will provide the best near-term gauge of how the market is tracking.
