For what is traditionally a seasonally strong month for Australia’s housing market, March isn’t proving to be all that strong in 2019.
Clearance rates still remain well below the levels of a year ago while prices in Australia’s largest cities are continuing to fall at decent clip, according to latest data.
According to CoreLogic, Australia’s preliminary combined capital city clearance rate rose to 56.1% last week, up from the initial estimate of 52.2% reported seven days earlier.
The lift came despite more homes going under hammer, lifting to 1,894 from 1,196 in the prior week.
Of those auctions held, CoreLogic received results from 1,416, equating to a reporting rate of 74.8%. That was above the 73.4% level seen seven days earlier.
Of those results received, 797 homes sold prior to, during or after auction. 619 failed to sell, including 108 that never actually made it to market.
While the national clearance rate currently sits well above the record lows struck late last year, the 56.1% level still remains well short of the 66% level seen a year ago when a far larger 3,316 homes went under the hammer.
Across the individual capitals, Sydney, at 63.1%, recorded the highest preliminary clearance rate across the country, followed by Canberra at 55.4% and Melbourne at 53.7%.
While that was an improvement on the levels of a week earlier, all three cities still recorded a lower preliminary rate than the final rate registered in the same corresponding week a year ago.
Elsewhere, preliminary clearance rates also improved in Perth and Brisbane compared to a week earlier although Adelaide, at 54.8%, was marginally weaker than the 55.3% level recorded seven days earlier.
Given the national preliminary clearance rate and reporting rates, the final clearance rate for the week is likely to be revised down to the low 50% region when released by CoreLogic on Thursday.
In the prior week, the preliminary national estimate was revised down from 52.2% to a final reading of 47.8%.
Despite the improvement in clearance rates in early 2019, that has not helped to stabilise home prices which have continued to fall.
Based on settled sales received, daily data from CoreLogic showed prices in Sydney and Melbourne fell by 0.3% last week, outpacing declines of 0.2% in Brisbane and 0.1% in Adelaide. Perth prices were stable compared to a week earlier.
Those weekly declines extended the price falls in Sydney and Melbourne since the start of the month to 0.6% and 0.5% respectively. Prices have also fallen 0.2% in Brisbane and Adelaide since the end of February. Mirroring the weekly result, prices in Perth have been flat so far in March.
While prices in Sydney and Melbourne have now been falling for well over a year, the recent scale of declines in both cities is noteworthy given March is traditionally the seasonally strongest month for home prices in Australia.
Even with far fewer new properties being listed, prices are continuing to ease lower, reflecting the impact of tighter lending standards, uncertainty ahead of the federal election and expectations that prices will continue to fall in the period ahead.
The lift in auction clearance rates suggests that along with reduced volumes, price expectations among vendors may have also been adjusted lower, contributing to more properties clearing than what was the case late last year.