Cash Rate Hike Sinks Capital City Auction Clearance Rates

The Reserve Bank of Australia’s (RBA’s) recent decision to raise the official cash rate by 25 basis points has had a noticeable impact on auction clearance rates across the country’s capital cities, according to preliminary data from Cotality. The combined clearance rate for the capitals dropped to 48.2%, the lowest in three months since June 21st. Brisbane, Adelaide, and Canberra saw the most significant declines, with clearance rates of 25.6%, 41.5%, and 41.7% respectively. Sydney and Melbourne were the only cities to maintain rates above 50%, at 55.7% and 50.6% respectively.

The combined clearance rate is down nearly 20% compared to the same period last year, with Sydney, Melbourne, Brisbane, Adelaide, and Canberra experiencing declines of -13%, -16%, -40%, -37%, and -27% respectively. Cotality’s analysis suggests that the cash rate hike likely contributed to this trend by affecting buyer confidence and borrowing capacity. Brisbane’s clearance rate, in particular, fell by 16.9 percentage points, marking the third time this year it has dipped below 20%.

Auction volumes remained relatively stable, with 139 auctions held compared to 140 the previous week, though this was 6.1% lower than the same week last year. Adelaide saw a 32% drop in auctions from the previous week but a 6.2% increase compared to last year. Canberra experienced the largest annual fall in auction volumes, with 46% fewer auctions than the same week last year. The preliminary clearance rate in Canberra dropped 12.2 percentage points to 41.7%, below the spring average of 47.3%.

In the last four weeks, over 22,000 new properties were listed for sale across all capital cities, representing more than 25% of total listings. This number was highest in Hobart, at over 33%, while Melbourne, Canberra, and Brisbane remained more muted at around 24% and 23% respectively.