Australian Housing Market Slows as Auction Clearance Rates Hit Multi-Year Low
Preliminary data indicates that the share of homes successfully sold at auction in Australia last week reached its lowest point in years, signalling a significant slowdown in the housing market. The national auction clearance rate for the week ending Sunday, 5 April, dropped to just 55.5%, according to preliminary figures from Cotality.
Steep Decline in Clearance Rates
This marks a sharp fall from the previous week's preliminary rate of 60.9%, which was later finalised to 52.7%—the lowest rate since December 2022. During that period, home prices were declining as interest rates rose. With preliminary rates often decreasing once finalised, last week's rate may ultimately be among the lowest recorded since the COVID-19 pandemic outbreak in 2020.
Price Downturns in Major Cities
Sydney and Melbourne experienced an acceleration in their house price downturns over the week. In Sydney, the three-monthly fall in home values reached 0.3%, up from 0.2% a week ago. Melbourne saw a more pronounced decline, with quarterly values dropping 0.7%, compared to 0.6% previously.
Brisbane's price growth also slowed, with quarterly growth slipping to 4.8% from 5.1%. Meanwhile, Perth and Adelaide held steady, showing no significant changes in their market conditions.
Impact of the Long Weekend
However, the data may not be entirely representative due to the long weekend, which led many vendors and buyers to take time off. There were only 694 auctions held across Australia's capital cities, with Cotality tracking 622 of those. This is a substantial decrease from the 3,983 auctions conducted the week prior, potentially skewing the results.
Overall, the housing market is showing clear signs of cooling, with auction clearance rates hitting multi-year lows and price declines intensifying in key urban centres. The upcoming weeks will be crucial in determining whether this trend persists or if the market stabilises.
