What happened this week
Across the capitals, Cotality logged 1,888 auctions last week - 11.4% more than the prior week - but still 41.1% beneath the same week a year ago. At 44%, the preliminary clearance rate marked the weakest result since April 2020.
Auction activity improved across most capitals, yet volumes in Sydney, Melbourne and Canberra are still running more than 40% below their year earlier pace.
City level picture
Sydney hosted 716 auctions, 3.5% higher week over week but 42% below last year, with a preliminary clearance rate of 48.1%. Melbourne saw 692 auctions, up 16.5% from the week before and down 52.3% year over year, and its preliminary clearance rate eased to 47.8%. Brisbane hosted 235 auctions, a 9.8% increase from a year ago, placing it among the limited number of capitals with higher activity than last year. Its preliminary clearance rate was 25.3% and has stayed under 30% in five of the past seven weeks.
The macro backdrop
Australia could be in the midst of its most severe housing slump in decades, with the Reserve Bank raising rates to curb inflation and the May budget trimming tax perks for property investors. After this month's increase, the RBA's cash rate stands at 4.85%, the highest in 18 years.
Financing is tightening too. The value of newly originated home loans fell 15.5% over the September quarter, nearly twice economists' expectations, the ABS reported last week. Investor lending dropped 32.3% by value in the same period.
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Why it matters for your portfolio
Clearance rates below 50% and activity still well under last year's levels point to a cooler housing market, which tends to weigh on volumes for brokers, developers and building suppliers while easing some pressure on prices and inflation. In plain English: credit is scarcer, buyers are choosier, and sellers have to meet the market.
If your portfolio touches housing or mortgage credit, the combination of a 4.85% cash rate and a record quarterly slide in loan values signals tighter conditions to underwrite into and slower turnover to model.
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