Australian Home Auction Clearance Rates Hit 10-Week Low

The Reserve Bank of Australia is widely expected to increase the official cash rate by 0.25% during its meeting on Tuesday, as the national residential auction market shows signs of weakening. Preliminary data from Cotality indicates the national clearance rate fell to 50.3% this weekend, marking the lowest level in 10 weeks.

Auction volumes dropped 22.4% from the previous week to 1,428 total auctions, a decline attributed partly to the AFL Grand Final. Melbourne experienced a sharp drop in its clearance rate to 48.8%, the lowest since September 2021, while Sydney's rate fell to 53.6%.

Dwelling values across the five largest capital cities decreased by 1.3% over the past month, with Sydney and Melbourne seeing the most significant declines from their peaks. Financial markets anticipate further interest rate hikes, which may trigger a house price correction of the largest magnitude seen in over 40 years.