Earlier today RP Data released its final auction clearance rate result for last week. Across the combined capital cities, auction clearance rates reached their lowest level in 22 weeks with the result replicated across the two largest auction markets, Melbourne and Sydney. Across the combined capital cities, auction clearance rates were recorded at 63.5% down from 68.1% over the previous week. In Melbourne clearance rates were recorded at 65.5% compared to 69.6% the previous week. The number of auctions also rose significantly from 220 the previous week to 1,139 the previous week. In Sydney, clearance rates were recorded at 68.1% down from 75.6% over the previous week. The chart below shows the clearance rate across the capital cities.
As you say, it is one week of data so I don't want to get too carried away. I think the most likely reason is that vendors are getting too carried away with their expectations. Our data shows the rate of growth is slowing across both cities and vendors often take some time to adjust to the changing conditions. We have also seen a reasonably strong increase in property listings over recent while transactions seem to be softening so maybe a little less demand but more supply is starting to impact the market too. A few more weeks and we should have an idea of exactly what is going on (should the trend continue).
Some quiet significant falls. While one week does not make a trend it's certainly interesting that Sydney and Melbourne, the two cities that have featured heavily in RBA rhetoric of late, saw rates drop sharply. Do you think it's increased chatter about macroprudential tools being implemented or something else, for instance, increased vendor expectations?
Cheers, great update. Will be interesting to see what happens in the weeks ahead, particularly given monetary and regulatory policy implications.