Australian auction clearance rates have fallen to the lowest level in two years, led by a sharp decline in Sydney and Melbourne, Australia’s largest and most expensive housing markets.

According to CoreLogic, last week’s combined capital city clearance rate fell to just 60.9%, down from 62.8% in the previous week.

That’s the lowest level since since late 2015 and early 2016.

A whopping 3,390 properties went under the hammer, making it the third-busiest week for activity this year. Of those, CoreLogic received results from 3,056 auctions with just 1,863 of those properties selling

By individual capital, Sydney’s final clearance rate tumbled to just 54.8%, down substantially on the 58.5% level reported a week earlier.

Like the national figure, it too sits at the lowest level in close to two years.

The sharp decline came despite a decrease in the number of properties up for sale, falling to 1,061 from 1,102 in the previous week.

Seemingly following in Sydney’s footsteps, Melbourne’s final clearance rates fell to 66.9%, the second week in a row the city recorded a sub-70% level.

It was the lowest level since July 2016.

However, unlike Sydney, the decline corresponded with a sharp increase in the number of properties that went up for sale, rising to 1,732 from 1,296 a week earlier.

CoreLogic said that was the second-highest level this year, only surpassed by the weekend before the Melbourne Cup Carnival in early November.

As seen in the table below, gone are the days of regions in Sydney and Melbourne recording clearance rates of 80% or higher, replaced instead by figures in the 70% region or lower.

Yet another sign that Australia’s once-hot housing markets are slowing, impacted by tighter investor lending restrictions, affordability constraints and higher stock availability, especially in Sydney.

Outside of Sydney and Melbourne, Australia’s smaller capitals put in a mixed performance during the week with clearance rates lifting in Adelaide, Brisbane and Tasmania, offsetting weaker outcomes in Canberra and Perth.

Turning to the week ahead, it looks set to be another bumper period of activity with CoreLogic currently tracking 3,208 auctions.

Across Melbourne, 1,608 homes will go under hammer, down from the 1,732 auctions last week. Providing a stern test for Sydney’s market, auction volumes will increase to 1,153.

All other capitals will see auction volumes fall from the previous week.

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