• Australian home prices are still falling, even with a stabilisation in auction clearance rates.
• Prices declines last week were once again led by Sydney and Melbourne.
• Property listings in these cities have risen sharply over the past 12 months.

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Australian auction clearance rates may be stabilising but home prices continue to fall.

According to data released by CoreLogic, the median home price in Australia’s five mainland capital cities — Sydney, Melbourne, Brisbane, Adelaide and Perth — fell 0.1% last week in average weighted terms, extending the decline over the past month to 0.3%.

Year-to-date, the median price in these cities has fallen 2.9%, leaving the decline over the past year at 3.4%.

As has been the case for some time, the national decline last week was led by falls in Sydney and Melbourne where median prices fell 0.2% apiece. Perth’s median also fell by 0.1% while prices in Brisbane and Adelaide were stable.

CoreLogic reported that preliminary auction clearance rates across the nation’s capitals improved a touch over the week, adding to signs they have stabilised after steadily falling in the first half of the year. However, fitting with the price declines reported, clearance rates still remain at levels that point to further modest weakness ahead.

Over the past month, price declines of 0.5% were recorded in both Melbourne and Perth. They fell by a smaller 0.3% in both Sydney and Brisbane. Adelaide was the only mainland capital to buck the trend with the median price increasing 0.2% from a month earlier.

So far this year, the largest price declines have been seen in Sydney and Melbourne with median values down 3.7% and 3.5% respectively. Perth prices have also fallen by 2.4%.

In contrast, values have increased by 0.2% and 0.6% respectively in Brisbane and Adelaide.

On top of tighter lending standards, souring sentiment towards the outlook for prices, as well as lower levels of local and foreign investor activity and recent increases in variable mortgage rates from many Australian lenders, has undoubtedly contributed to Sydney and Melbourne-led national slowdown seen in 2018.

This drop in buyer demand — whether forced by credit tightening or voluntary in nature — has also contributed to a noticeable lift in the number of properties listed for sale across Australia’s capital cities.

They’ve risen by 8.3% over the past year to 111,616, according to separate data from CoreLogic, led by large growth in Sydney and Melbourne listings which have increased by 21.8% and 13.9% respectively.

Reflecting reduced demand, that increase has come despite a decline in new listings — defined as properties that have not been put up for sale in the past six months — which have fallen by 4.4% across the capitals over the past year.

Supply is elevated and demand is weak, helping to explain why prices are still falling across most parts of the country.

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