After a record volume of auctions were held in the first four months of the year, last month saw an annual decline in listings for the first time since February 2021.
Domain’s Auction Report for May showed auction clearance rates had also fallen in 70 per cent of all capital cities as more homes came on the market and competition also reduced.
Describing it as a “slowdown in the property market”, Domain reported that Sydney, Melbourne and Brisbane had all recorded their weakest clearance rates of the year.
Yet, despite the recent fall in property prices, the median house auction price continued to grow annually in all states.
Sydney’s median auction house price decreased over the month by 3.1 per cent to $1.8 million, but was still up 1.9 per cent annually.
Melbourne’s median auction house price was higher over the month, up 2.2 per cent, and continues to remain higher annually, up 3.9 per cent to $1.18 million.
Canberra’s median auction house price decreased for the second consecutive month in May, down by 4.9 per cent over the month but was still higher annually by 7.7 per cent to $1.05 million.
Brisbane’s median auction house price hit a record high in May at $1.21 million, growing by 19.5 per cent annually.
Looking to the months ahead, Domain Chief of Research and Economics, Dr Nicola Powell said while auction listings remain historically higher, the number of homes coming onto the auction market was slowing.
This was a result of tempering price growth and a realignment of seller’s price expectations in the wake of May’s cash rate rise
“It will be interesting to observe how volumes and clearance rates perform as we move closer to the second half of the year, as the possibility of more increases in the cash rate seems likely,” Dr Powell said.
|Auction performance for May|
Sydney’s clearance rates fell to 55.9 per cent in May, remaining below 60 per cent for the second consecutive month after revising down for April, according to Domain’s data.
“This is the lowest rate seen since the COVID-induced decline in clearance rates in April 2020 (excluding January, due to lower volumes) highlighting the increasingly cooling auction market,” they said.
In terms of auction volumes, May numbers were tracking 15.5 per cent higher than the five-year average but have fallen annually for the first time since August 2021, with May recording the lowest volumes seen since September 2021 (excluding January).
In Melbourne, clearance rates fell over the month of May, down 2.9 percentage points to 59.1 per cent and 12.3 percentage points lower than May 2021.
Auction volumes also fell over the month for the first time this year (excluding January due to lower volumes) and were also lower annually for the first time since February 2021.
The number of auctions in May remained above the five-year average auction volume for May 2017-2021 by 22.5 per cent, but Domain noted this rate was slowing down.