The results of this weekend’s auctions – which followed more price falls in January reported by CoreLogic – also left homeowners and investors little to be cheery about. CoreLogic’s national preliminary clearance rate came in at 47.8 per cent, only slightly up on December’s low 40 per cent range.
Over the weekend, Sydney showed a slight tick-up in its clearance rate, which came in at 53.7 per cent on preliminary CoreLogic figures, while Melbourne was very weak with just 44.1 per cent of homes selling under the hammer.
Among the smaller auction markets, Adelaide managed a 52.8 per cent preliminary clearance rate from 109 auctions, with Brisbane at 40.6 per cent from 54 auctions and Perth at 25 per cent from 30 auctions.
AMP Capital chief economist Shane Oliver, who expects Sydney and Melbourne house prices to fall 20 per cent from their peaks, called the weekend auction results “overall still weak”.
“There was a bit of a bounce in Sydney from December, but I wouldn’t read much into that as listings and reported sold numbers were very low and February tends to see a bounce from December,” Dr Oliver said.
SQM Research’s Louis Christopher also called the results “weak”.
“Clearance rates should be up for the first auctions of the year in the cities today. Seasonally, that is normal for this time of year. Anecdotally, I saw some eager buyers at the properties I attended,” he said.
The weak auction results followed Friday’s release of CoreLogic figures for January which showed price falls in all the capital cities with Melbourne and Sydney, where about 55 per cent of the value of the housing market is concentrated, registering drops of 1.6 per cent and 1.3 per cent respectively.
Domain, majority owned by Nine, the publisher of The Australian Financial Review, recorded a preliminary clearance rate of 44.4 per cent compared with 57 per cent a year ago, but from a lower 357 auctions, with Sydney at 49 per cent and Melbourne at 44 per cent.
The first major auction weekend of the year comes just ahead of Monday afternoon’s release of Kenneth Hayne’s final report of the banking royal commission and the government’s response and the first meeting of the Reserve Bank on Tuesday to decide whether to adjust the cash rate, which is now 1.5 per cent and hasn’t changed since August 2016.
A survey of economists by the Financial Review suggested no changes for the whole of 2019 with a hike expected in mid-2020.