Buyers and sellers remain locked in a staring competition with national auction clearance rates continuing to tumble.
For seven weeks in a row, the national clearance rate has languished below 50 per cent and Sydney’s clearance rate could now be heading towards a 30-year low.
Property market analyst Louis Christopher of SQM Research told Your Money Live the falling clearance rates were “a strong indicator that something bad is going on in the market right now.”
Clearance rates were at 48 per cent in Melbourne and 41 per cent in Sydney over the weekend, however there are expectations the figures will be revised down further still.
That follows an all time record low last weekend for Melbourne, which saw clearance rates of just 34.5 per cent.
Sydney’s record low from three decades ago is 33 per cent, and SQM believes the revised numbers from this weekend will reveal Sydney to be very near that figure.
Auction clearance rates are considered a strong indicator of the health of the Australia’s economy and the housing market.
When clearance rates begin to drop, it’s a sign the house price declines will soon follow.
“What we are seeing is less and less auctions out there and more and more vendors and agents deciding that the best way to go is sell via private treaty,” he said.
“Auction volumes are down by some 30-40 per cent, but total listings are at about 25 per cent for Sydney and Melbourne year-on-year, which is a big increase and does indicate that stocks are struggling to sell.”