While Australian auction clearance rates appear to be rebounding, led by a noticeable improvement in Sydney, that’s yet to have a meaningful impact on prices which continued to fall last week.

According to CoreLogic, the prices across Australia’s five mainland state capitals fell by 0.1% last week in average weighted terms, taking the decline over the past month to 0.4%.

In contrast to auction clearance rates which had Sydney at the top of the charts based off preliminary data, the national decline was yet again led by Australia’s largest and most expensive housing market where prices fell by a further 0.2% during the week.

That took the gains in Sydney over the past year to just 0.1%, meaning prices are now going backwards in real, inflation-adjusted terms.

That’s a far cry from the double-digit percentage gains seen less than a year ago.

Elsewhere, prices fell by 0.1% in all other capitals over the week, including in Melbourne.

As seen in the table below from CoreLogic, that saw prices go backwards in all of these centres by between 0.2% to 0.3% over the month.

Source: CoreLogic

On an annualised basis, Melbourne price growth continued to outpace all other mainland state capitals, lifting by 7.3%.

However, like Sydney, that rate is well below the levels seen less than a year ago.

Prices rose by 1.9% in Brisbane and 2.3% in Adelaide over the year.

As has been the case for some time now, Perth was the only capital to record a decline over the year at 2.8%. Based on current trends, it will soon be joined by Sydney.

Combined, prices grew by 2.4% in these capitals over the year in weighted terms.

Source: CoreLogic

Contributing to the divergent price performance over the year, and general slowdown from a national perspective, CoreLogic said the amount of property up for sale increased to 102,006 dwellings, up 1.2% from the same corresponding week in 2017.

As seen in the table below, that masked some large variances by individual capital city.

Source: CoreLogic

In Sydney, properties up for sale grew by 23.4% over the year to 24,407 dwellings. Stock on offer also increased in Melbourne and Adelaide, rising by 3.3% and 0.1% dwellings respectively to 27,643 and 8,105.

The increase in Sydney partially explains the sharp slowdown, and now reversal, in price growth in Australia’s largest city.

It also hints that the recent improvement in auction clearance rates in Sydney may be due to vendors accepting lower selling prices than what would have otherwise been the case in the past.

Stock available for sale fell in all other Australian capitals, including in Hobart, the current home to the strongest price growth in Australia.

DR

Original article published in Business Insider