Sydney Auction Clearance Rate Falls To GFC Levels

Video Transcript

Coming up, my Friday financial market update for the 9nd of November 2018: and the headline is Sydney’s auction clearance rate hits GFC levels.

So to begin Core Logics final Australian auction results are in for the week ending the 04/11/18 and the clearance numbers are continuing their downward trend.

Melbourne’s clearance rate was 45.7% with 21% of auctions going unreported. Melbourne’s actual mortgage volume was small due to the Melbourne Cup long weekend, so the smaller sample size does distort the result somewhat.

Having said that Sydney’s clearance rate was 42.6% with an 18% unreported figure. To put Sydney’s result in context that is the lowest clearance rate Sydney has experienced since December 2008. Lehman Brothers collapsed in September 2008 so we are talking about a clearance rate that we haven’t seen since the onset of the Global Financial Crisis.

Corelogic also reported that In the year to July 2018, Australian dwelling sales volume at the 5-city level, have fallen to their lowest levels in 5 years. Sales volumes are down 25% since their August 2015 peak.

In terms of price, dwelling values have fallen by 5.1% since their most recent peak, led by Sydney down 8.4%, Melbourne down 5.0% and Perth down 14.3%.

To further add to the pain a new report from Macquarie Group has forecast that home values are likely to plummet much more than expected. To quote from the report“Sydney and Melbourne housing prices are now more likely to fall by 15 to 20 per cent from the peak.”

In other finance news the early reappointment of Australian Prudential Regulation Authority chairman Wayne Byres, for another 5 years has been greeted with a great deal of criticism in some quarters.

The decision to reappoint Chairman Byres seems extraordinarily ill timed given the questions that have been raised by the Banking Royal Commission. My understanding is that when the commission resumes it will be focusing on the regulators APRA and ASIC.

So I will finish this video on that note.

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All information provided here is general in nature and is specific to an Australian audience and the Australian finance market.

Thanks for watching and see you next Friday.