Auction clearance rates across the country tumbled over the weekend as Tuesday’s official rate rise – and the prospect of more unofficial rate rises to come – hit buyer confidence.
Softening buyer sentiment was most clearly on show in Sydney, where Saturday’s 51% clearance rate on 293 properties for sale was down sharply on the 60% sold successfully on the corresponding weekend last year.
But Sydney wasn’t the sole poor performer, with average clearance rates for Melbourne, Adelaide and Brisbane at 55%, down from 63% and 66% in the preceding two weekends, according to Australian Property Monitor data.
Melbourne performed better, with 66% of 419 homes selling, but clearance rates were still down on the 78% rate achieved this time last year – although a long weekend in Victoria may have affected the result.
In Brisbane, 44% of 63 properties up for auction were sold, down from 52% this time last year and 49% last weekend, while in Adelaide 15 of 25 properties, or 58%, were sold.
Auction clearance rates right across the nation in recent weeks are about 10% down on where they were this time last year according to Australian Property Monitors operations manager Michael McNamara.
“Right across the country auction clearance rates are much softer than this time last year, and that has to be buyer confidence being undermined by prevailing economic conditions and tighter mortgage rates,” McNamara says.
But, he says, it could take some months before the drop off in buyers filters through to lower house prices.
“Property markets are like these big cruise ships that take a while to slow down and to respond to market signals to the market, so it’s not likely we’ll see any reflection in price until the back half of the year,” McNamara says.