High inflation, consecutive rate hikes and housing downturn impact Australian suburbs as they drop below $1 million while combined capital cities hold the busiest auction week since mid-June with 2,393 homes.

Auction activities continue to fly as 2,393 homes are taken to auction, but clearance rates experience a slight drop.

Suburbs in Australia’s million-dollar club shrink

Based on CoreLogic’s research, housing market conditions continued to slightly weaken as the median values of 169 suburbs have fallen below seven figures across capital cities and regional areas.

Data showed that Sydney and Melbourne were the only capital cities that have recorded a steep decline in the number of million-dollar suburbs compared to October 2021.

Moreover, these capitals have also led the market downturn as Sydney’s dwelling values were down to 8.6% 12 months to October while Melbourne’s declined to 5.6%.

CoreLogic’s Research Director, Tim Lawless mentioned, “Many of these outer fringe suburbs that have fallen below the $1 million mark were previously showing median values that were only marginally over the seven-figure threshold, so in many cases, a small percentage drop in value has been enough to push values below $1 million.”

“It is likely values will continue to trend lower across each of the broad valuation cohorts of the market, but while the upper quartile of the housing market has led the downturn, it’s also the sector of the market that is leading the easing in the pace of declines,” he said.

“The trend over the past few months has been towards an easing in the rate of decline, especially in Sydney and Melbourne, so if that trend persists, we may not see an acceleration in the number of suburbs where the median value drops below $1 million.”

Preliminary total auction rate

Up by 4.1% from the previous week’s record of 2,298, capital cities held the busiest auction week since mid-June with 2,393 homes under the hammer. While the uptrend continued the streak, this was –43.7% lower than this time last year when 4,251 homes were taken to auction.

While Melbourne held the busiest auction with 987 homes this week, this was still a bit shy from last week’s record of 1,008 and almost halved last year’s record of 1,910 homes.

Meanwhile, in Sydney, 933 homes went under the hammer – a 19.9% jump from the previous week when the city recorded 778 auctions. This marked Sydney’s busiest auction week since late May (1,109).

Across the smaller capitals, Brisbane remained the busiest market with 154 homes, followed by Canberra with 152 and Adelaide with 148. In Perth, 16 homes were taken to auction while Tasmania recorded three.

Preliminary total clearance rate 

While auction activities ramped up, the preliminary clearance rate across the combined capital cities fell by –1.6% this week. Of the 1,824 results collected so far, 61.5% of auctions were successful, but this time last year, 68.5% of auctions returned successfully.

In Melbourne, the preliminary clearance rate still held above the 60% mark with 61% of the 774 results collected so far recording success. However, this was -4.5% lower compared to last week’s early rate of 65.5% and –5.3% lower than this time last year.

Of the 740 results collected so far, Sydney had a success rate of 64.2%, which was down by -3.3% from the previous week’s preliminary clearance rate of 67.5%. This time last year, the city reported a 67.2% clearance rate.

Adelaide still recorded the most successful preliminary clearance rate of the smaller capitals this week with 65.9%, followed closely by Canberra with 62.8% and Brisbane with 47.4%. Meanwhile, Perth had three successful auctions of the eight results collected so far, and Tasmania’s three auctions were unsuccessful.

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Source: CoreLogic