Auction market crunched lower amid deteriorating sentiment

Australia's auction market has seen a further decline, with the preliminary clearance rate dropping to 52.4%, a decrease from 56.5% the previous weekend. This figure has been revised lower to 48.9% upon final numbers. Prior to this, in the same period last year, 70.0% of auctions were successful. Nationwide auction figures are also significantly lower, down by 32.3% compared to the same week a year ago.

Research from Cotality indicates that the downward trend has continued throughout the winter, with city auction volumes ending the season 18% lower than during the previous winter. The annual decline has been particularly sharp in the largest markets, with decreases of 25% in Sydney, 19% in Melbourne, and 14% in the Australian Capital Territory.

Cotality's daily dwelling values index has also been weakening, with values at the five-city aggregate level falling by 1.1% over the past 28 days. All major markets are experiencing substantial declines. The housing correction in Australia is intensifying and spreading, driven by deteriorating buyer sentiment. Anticipations of further interest rate hikes by the Reserve Bank are expected to exacerbate the gloom in the housing market.