Auction market plumbs new low as buyers thin

Australia's auction market has hit new lows, with clearance rates plummeting to their lowest point since the COVID lockdowns in April 2020. In November, the average final clearance rate for the month was a mere 43%, with final weekly clearance rates hovering in the 40s for 22 of the past 24 weeks. This weekend's preliminary auction clearance rate indicates that the market has softened further, marking the lowest preliminary result since April 2020.

The national rate of 44.0% is significantly below the spring average of 50.4% and the winter average of 52.3%. It suggests that the final national auction clearance rate could drop into the low 40s or even the high 30s once more data is collected.

Sydney's preliminary clearance rate dropped 4.2 percentage points to 48.1%, falling below the 50% mark for the first time this spring and below the spring average of 53.7%. Melbourne experienced a sharp decline, with its clearance rate dropping to 47.8%, an 11.3 percentage point decrease from last week and well below the spring average of 54.5%.

This marked Melbourne's lowest preliminary clearance rate since September 2021. Brisbane's preliminary clearance rate fell to a mere 25.3%, a 5.9 percentage point decrease from last week and remaining well below the spring average of 30.3%. The city has seen its clearance rate below 30% in five of the past seven weeks.

The nationwide housing downturn remains entrenched, with property values falling by 9.0% across the five main capital city markets. Each city has recorded significant drops, with no sign of recovery in sight. Given the lack of buyer demand, home prices have more ground to cover before stabilizing.