Clearance rates hold steady amidst data accuracy criticism

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Auction clearance rates remained around the 60% mark in Sydney and Melbourne at the weekend while arguments raged over their accuracy.

Australian Property Monitors reported that clearance rates in the two auction capitals of Australia were 61% and 59% respectively – the level around which clearance rates have hovered for much of the last 12 months. However, volumes have fallen significantly since this last year: Sydney saw just 286 properties go under the hammer, while 274 were up for sale in Melbourne.

The reported rates have also come under fire for being misleading, with SQM Research director Louis Christopher calling for urgent reforms and independent audits of data.

"APM came out and said that in Sydney the clearance rate was (61.1) per cent this weekend, but the reality was that with the total listed for auction, compared to the number sold ... you get a clearance rate in the 40s," said Christopher to the Australian.

John Edwards, chief executive of research firm Residex, has also criticised the use of seasonally-adjusted figures in ascertaining house price values. Edwards said that the use of seasonal adjustment in figures for the first quarter of 2011 has exaggerated the amount by which values are correcting.

"Growth figures should not be seasonally adjusted," said Mr. Edwards. "We are not measuring a commodity like wheat or wool production, or for that matter housing approvals or lending activity, we are measuring a fixed asset value and it is important not to confuse people and only present what has actually happened."

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