Auction clearance rates up as the available housing stock falters
There are signs that the appetite for property is growing
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Auction clearance rates are up but the number of properties being put to market across Australia declined over the weekend, the latest data shows.
CoreLogic reports that of the 1,285 results recorded so far, 73.8 percent of properties were successfully sold nationally, the eighth week in a row clearance rates have been higher than 70 percent. It’s a dramatic improvement on this time last year when CoreLogic data shows the clearance rate was at 56.8 percent.
Preliminary clearance rates were particularly buoyant in Sydney (78.7 percent), while successful Melbourne auctions just breached the 70 percent point at 70.1 percent, its lowest preliminary result in 11 weeks.
Adelaide once again proved its market resilience, recording the highest preliminary auction clearance rate of 79.7 percent. Of the smaller capitals, Brisbane has seen the lowest preliminary clearance rate at 67.5 percent.
But while clearance rates continue to steadily climb, it’s a slightly different story with the numbers of properties being put to market. Melbourne saw a -15.5 percent fall in the properties set to go under the hammer last weekend, from 864 the previous week to 730. It was less dramatic in Sydney, with the number of homes available falling from 764 the week before to 763 over the weekend. It was a similar story in the smaller capitals, with only Canberra bucking the trend, offering 78 for auction, up by 26 from the previous week.
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Excluding the Covid-19 pandemic period, annual growth was the lowest since 1992
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Australia’s commodity-rich economy recorded its weakest growth momentum since the early 1990s in the second quarter, as consumers and businesses continued to feel the impact of high interest rates, with little expectation of a reprieve from the Reserve Bank of Australia in the near term.
The economy grew 0.2% in the second quarter from the first, with annual growth running at 1.0%, the Australian Bureau of Statistics said Wednesday. The results were in line with market expectations.
It was the 11th consecutive quarter of growth, although the economy slowed sharply over the year to June 30, the ABS said.
Excluding the Covid-19 pandemic period, annual growth was the lowest since 1992, the year that included a gradual recovery from a recession in 1991.
The economy remained in a deep per capita recession, with gross domestic product per capita falling 0.4% from the previous quarter, a sixth consecutive quarterly fall, the ABS said.
A big area of weakness in the economy was household spending, which fell 0.2% from the first quarter, detracting 0.1 percentage point from GDP growth.
On a yearly basis, consumption growth came in at just 0.5% in the second quarter, well below the 1.1% figure the RBA had expected, and was broad-based.
The soft growth report comes as the RBA continues to warn that inflation remains stubbornly high, ruling out near-term interest-rate cuts.
RBA Gov. Michele Bullock said last month that near-term rate cuts aren’t being considered.
Money markets have priced in a cut at the end of this year, while most economists expect that the RBA will stand pat until early 2025.
Treasurer Jim Chalmers has warned this week that high interest rates are “smashing the economy.”
Still, with income tax cuts delivered at the start of July, there are some expectations that consumers will be in a better position to spend in the third quarter, reviving the economy to some degree.
“Output has now grown at 0.2% for three consecutive quarters now. That leaves little doubt that the economy is growing well below potential,” said Abhijit Surya, economist at Capital Economics.
“But if activity does continue to disappoint, the RBA could well cut interest rates sooner,” Surya added.
Government spending rose 1.4% over the quarter, due in part to strength in social-benefits programs for health services, the ABS said.
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