Strong listings activity driving auctions up, but clearance rates fading

By Gerard Burg, Head of Research Australia, Cotality (Formerly CoreLogic)

The combined capitals auction clearance rate faded to the lowest reading so far this year, with preliminary results indicating only 66.6% of auctions were successful. The soft outcome comes after the preliminary clearance rate bounced back to 72.1% last week, but after a sharp downward revision, the final result ended at 57.9%, the lowest since mid-December last year.

2,871 capital city homes were auctioned last week, a 58% jump on the volume a week prior, which was disrupted by the long weekend in some states. Compared with the same week a year ago, the number of auctions was up 16%, continuing a trend of strong listings activity that has been apparent more broadly in the flow of new listings coming to market.

Melbourne led the capitals for auction activity, with 1,389 homes going under the hammer, up 144% on the week prior, which was impacted by Labour Day long weekend. 66.9% of auctions have reported a positive result based on the collection so far, down from 67.9% the previous week (revised down to 52.6%) and the lowest preliminary clearance rate since mid-December last year.

1,000 auctions were held in Sydney last week, a 6.2% rise from the week prior and only the second time this year the volume of auctions has reached the 1,000 mark. The preliminary clearance, at 65.1%, was the lowest so far this year and well down from the week prior at 74.3% (revised down to 58.6% once finalised).

Brisbane saw 190 auctions held last week, the second-highest number of auctions held so far this year. With a preliminary clearance rate of 65.9%, this was Brisbane’s softest auction outcome so far this year.

155 auctions were held across Adelaide, 45% more than the previous week and on par with the week ending February 1st as the most auctions held so far this year. The preliminary clearance rate bucked the weaker trend seen across most of the capitals, coming in at 84.0%, the second-highest early result through the year-to-date. Last week’s 81.0% preliminary clearance was revised down to 72.9% once finalised.

Canberra hosted 118 auctions last week, more than double the volume a week earlier (55), which was impacted by the Canberra Day long weekend. The preliminary clearance rate sank to 55.4%, down from 67.9% the week prior. 18 auctions were held in Perth with a preliminary clearance rate of 57.1% and only one auction was held in Tasmania.

This week we should see a similar number of auctions held, with around 2,900 homes currently scheduled to go under the hammer, rising to around 4,000 auctions in the ramp-up to Easter.