The number of capital city homes clearing auctions reached its lowest recorded figure in over two years, according to new data.
As calculated by the property platform’s latest Auction Report, the clearance rate across Australia’s capitals was 51.8 per cent in July, the lowest rate reported since May 2020.
This result reflected a 30-bp fall and an annual decline of 17.7 per cent.
Across the country, every capital city reported, excluding Adelaide, experienced a clearance rate lower than 55 per cent, with the South Australian capital hitting 60.6 per cent for the month.
The lowest reported was Brisbane at 38.6 per cent, reflecting a monthly plummet of 7 per cent and a yearly decline of 22 per cent.
Sydney was the only capital to report an increase in its clearance rate over July, lifting by 1.8 per cent to hit 51.9 per cent.
However, despite the uptick, the NSW capital reported a yearly loss of 18.3 per cent.
Canberra experienced the highest year-on-year change, experiencing an annual change of -31.4 per cent.
Regional Australia also reported a loss of 70 bps over July, reaching a clearance rate of 42.8 per cent for the month.
This figure marked an annual loss of 17.3 per cent.
Domain has said this is the lowest clearance rate for Australia’s combined regions since July 2020.
Houses were found to be a consistent driver in this freefall, with the combined capitals and regions reporting respective clearance rates of 52.5 per cent and 41.5 per cent for July.
By month, this reflected a 20-bp lift for Australia’s capital cities, and a 1.5 per cent loss for the regions.
However, by year, this result is a fall of 19.5 per cent and 18.5 per cent respectively.
By comparison, unit clearance rates increased across Australia for July, lifting by 2.4 per cent in the capital and by 5 per cent in the regions.
Annually, they account for a – albeit smaller – decline of 7.1 per cent and 9.4 per cent respectively.
The results marked what has been a consistent trend downwards across the country over the last five months.
According to Domain’s figures, in February 2022, the average clearance rate for a capital city was 66.9 per cent.
For regional Australia, this was 58.4 per cent.
Domain chief of research and economics, Dr Nicola Powell, commented that rising interest rates “have further accelerated downward pressure on prices, affecting buyers’ borrowing power and adding further strain to mortgage affordability”.
“This is weighing on buyer sentiment and confidence and impacting clearance rates,” Ms Powell said.
Ms Powell added that Domain is also seeing a higher rate of withdrawn auctions “which indicates weakening market conditions as sellers are pulling their homes from auction and possibly looking at other sales methods instead”.
Separate data from SQM Research published earlier this month suggests that distressed listings are increasing across the country, with July marking the second consecutive monthly lift in Australians rushing to offload their properties.
