Brisbane auction clearance rate falls to 21.4%, lowest since April 2020
National preliminary clearance rates stayed below 50 per cent for a second straight week, with auction volumes across the capitals at levels last seen during the pandemic.
Image: Smart Property Investment
Brisbane's auction clearance rate dropped to its lowest level since April 2020 last week, with just 21.4 per cent of auctions resulting in a successful sale.
The national preliminary clearance rate fell to 48.8 per cent, the second consecutive week below 50 per cent, as borrowing capacity remains constrained after four rate rises this year.
Cotality's Market Indicator Summary shows 1,781 auctions were held across the capitals. Total volumes over the first six weeks of the season have fallen to levels not seen since the COVID-19 pandemic.
Sellers holding out in Brisbane
Apollo Auctions' Marcus Frater said many Brisbane vendors have been refusing bids that fall below reserve or don't match their expectations.
"We do have people there, and we do get a bid, whether it is at a level where it's been within the feedback or slightly around it, sometimes the sellers just don't want to accept it," he told SPI.
Frater said buyer confidence was likely dented by the Reserve Bank of Australia's fourth hike of the year, which has further squeezed borrowing capacity, with another hike possibly still to come this year.
"Someone might be approved for a certain amount, there's an interest rate rise or something that affects their situation, and they either have to go back through the process or where they were looking is no longer obtainable."
What it means for investors
Economist Annabelle Mezieres said investors may continue to have more leverage on price than a year ago, but will need to work out whether rental income can offset higher borrowing costs.
"The main challenge for investors will be that changes to taxation policy have provided a significant disincentive," she said.
"It's likely investors will be a substantially smaller portion of aggregate demand going forward."
How the other capitals fared
Melbourne's preliminary clearance rate rose to 54.8 per cent, up 4.2 percentage points on the week before, from 707 auctions — more than any other city.
Melbourne's auction volumes are set to fall sharply this week, down 34 per cent on last week. Cotality suggested a possible connection to Victoria's seller disclosure laws, which are likely to officially kick in this week.
"The timing suggests some vendors may have brought campaigns forward or delayed auction decisions as the industry adjusts to the new rules," it said.
Sydney's preliminary clearance rate slipped 2.8 percentage points to 52.9 per cent, its lowest result in 10 weeks, while volumes increased drastically to 653 homes following the long weekend.
Adelaide's preliminary clearance rate rose to 46.8 per cent from 41.5 per cent the previous week, across 140 auctions.
In the ACT, 66 auctions were held and 36.4 per cent reported a successful result — the territory's second-lowest preliminary clearance rate this year.
