Sydney’s auction clearance rate has dipped below 70% to its lowest September level in three years, in a telling sign that the Sydney property market is coming back down to earth.
Sydney’s September auction clearance rates dropped to 69.8%, according to figures compiled by Domain, from 73.9% in August. They are now sitting clearly below the 76.9% recorded in September 2014 and at their lowest levels for the year so far and the lowest September result since 2012.
According to Domain’s senior economist, Dr Andrew Wilson, record high volumes of auctions coupled with increased auction price have put downward pressure on clearance rates.
“The high volume of listings will continue to test the Sydney market. September alone recorded a record average of 859 weekend auctions. This is well ahead of the August average of 738 weekend auctions and the 590 conducted over September 2014,” he said.
Sydney’s September median auction price increased from $1,090,000 to $1,151,000 year-on year.
But Sydney isn’t alone. According to Domain’s data, all major capital cities except Adelaide are reporting decreases in clearance rates over the first month of spring.
Melbourne’s September auction clearance rate dropped slightly to 73.2%, from 75.2% recorded in August. The result is slightly below the 73.7% which recorded in September last year.
Brisbane’s auction clearance rate fell sharply over September, reversing the rising trend of recent months. The local auction clearance rate fell from 57.4% in August 2015 to just 46.2%. This is just slightly below the average auction clearance rate of 46.3% recorded in September last year.
Canberra’s auction market also tracked backwards over September, following the strong clearance rate result recorded in August. September’s auction clearance rate of 64.3% was down from the 70.7% recorded the previous month. The result, however, remains well ahead of the 56.3% recorded in September last year.
Adelaide, however, bucked the trend recording a September clearance rate of 65.3%. This result is slightly ahead of the 65.2% recorded in August and sits just below the 66% auction clearance rate recorded in September 2014.
“Not only was there an increase in Adelaide’s clearance rates over September, but there was also a significant increase in auction volumes. This reflects the growing confidence of sellers in the local market conditions,” Wilson said.
“Adelaide saw an average of 69 auctions each weekend over September. This is an increase from an average of 57 auctions per weekend over August and well ahead of the 49 averaged over September last year. Sharply higher volumes are however proving no barrier to higher clearance rates.”
Wilson says record-high volumes of auctions will continue to test capital city markets for the remainder of the year.