Auction sales low as buyers stay wary

For the fourth week in a row, fewer than half the homes offered at auction in capital cities sold.

CoreLogic’s Tim Lawless.

The number of homes going to auction lifted last week but clearance rates remained stubbornly low in the face of the tighter fin­ance market and worries about further price falls.

Preliminary results showed the clearance rate edged up from 47 per cent to 49.8 per cent in capital cities, lower than 12 months ago when about 65 per cent of homes were selling, ­research house Core­Logic said.

Volumes rose as 2119 homes were taken to auction across the country’s capital cities last week.

In previous years, auction numbers have topped 3000 a week and CoreLogic warned that despite the spring upswing, fresh stock additions were ­almost 4 per cent lower than at the same time a year ago and were hovering at their lowest seasonal level since 2012.

“The low level of new listing numbers can be attributed to weak vendor confidence; no surprise given housing market conditions have weakened and selling conditions have become more challenging,” CoreLogic head of research Tim Lawless said.

Sydney real estate agent John McGrath warned at the weekend that Sydney and Melbourne would see double-digit falls from peak to trough and said uncertainty from state and federal elections and the lending clampdown was hitting the sector.

AMP Capital chief economist Shane Oliver last week slashed his forecasts for Sydney and Melbourne house prices, saying they were likely to fall about 20 per cent from peak to trough.

The weak auction results marked the fourth week in a row of the clearance rate failing to crack 50 per cent.

Melbourne had 1088 auctions and the preliminary clearance rate slipped to 47.5 per cent.

There were 659 auctions in Sydney with clearance up from 45.1 per cent to 52.2 per cent.