Australia home auction clearance rate stuck below 50% for second week

[SYDNEY] Australia’s home auction clearance rate held below 50 per cent for the second week in a row as the central bank’s move to raise interest rates to a 15-year high weighs on buyer demand. 

Of the 1,781 properties auctioned in six state capital cities last week, 48.8 per cent were sold, according to data from property researcher Cotality. While that was up from 45.4 per cent the previous week, it was stuck below 50 per cent for the second straight week. 

In a further sign of weakness in the housing market, the number of auctions held through the first six weeks of the peak spring selling season is the lowest it has been since the pandemic lockdowns of 2020, Cotality said. 

Australia’s housing market slump is deepening, with nationwide prices in September retreating to levels last recorded a year ago.

Demand has been hit by higher borrowing costs and tax changes in the May Budget that curbed concessions for property investors. Prices in Sydney, the nation’s biggest city, have fallen almost 9 per cent from their peak in February. 

Auctions are a popular way of selling houses in Australia, particularly in the largest cities of Sydney and Melbourne, where desirable homes in established suburbs can attract numerous buyers, creating competition and pushing up prices in boom times.

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However, fewer auctions are successful in a downturn where sellers may have unrealistic expectations of what their property can fetch.    

There were 653 auctions held in Sydney last week, with a preliminary clearance rate of 52.9 per cent. In Melbourne, 707 homes were taken to auction, with a preliminary sales rate of 54.8 per cent. BLOOMBERG