Sydney and Melbourne are currently experiencing housing reforms, with both markets recording price declines of more than 2% over the past quarter.
The fall in prices is reflected in the auction markets of both cities, where clearance rates have fallen to their lowest levels in years.
Sydney’s final auction approval rate fell to 49 per cent in May, the lowest level since April 2020.
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Melbourne’s auction approval rate fell to 54 per cent in May, the lowest level since July 2022:
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The auction slump continued this weekend, with Cotality recording a national initial clearance rate of 51.1%, the lowest result since the week ending April 26, 2020.
Source: Cotality
Sydney’s initial clearance rate rose slightly this week, to 52.9% from 51.8% a week ago (revised to 46.5% once finalised), the third lowest initial clearance rate this year.
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Melbourne recorded an initial clearance rate of 52.3% this weekend, a sharp drop from the week before (58.1%, which was revised to 51.9% after finalization) and the lowest initial clearance rate since June 2021.
Brisbane’s initial clearance rate of 31.9% was the lowest since May 2020.
As illustrated above, auction clearance rates have historically been a strong leading indicator of housing price growth.
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Therefore, a falling auction clearance rate suggests that values will continue to fall.
