Auction clearance rates have bounced back to a seventh-month high, with vendors more prepared to meet the market according to new data.
Domain’s Auction Report for November 2022 shows clearance rates across the combined capitals increased marginally for the fourth month in a row, taking it to the highest point since April at 58.7 per cent.
Clearance rates are above 50 per cent across all capital city markets, apart from Brisbane, with the higher results being supported by low auction listings compared to last year.
However, volumes are steadily rising as expected in the warmer months of the year, which will test the strength of clearance rates according to the report.
Domain Chief of Research and Economics Dr Nicola Powell said clearance rates had continued to steadily rise as we moved through the busiest time of the auction calendar.
“This shows that cautious buyers and sellers are starting to see eye to eye amid falling house prices and rising interest rates,” Dr Powell said.
“While the monthly trend is showing stability, the capital city clearance rates are much lower compared to this time last year.
“The sold prior data is also at its highest point since April implying more vendors are opting to sell privately rather than going to auction in a lower demand market.”
Dr Powell said the cooler market will mean vendors will have to continue to meet the market.
“Moving into early next year, we’ll continue to see sellers needing to be more realistic on price while buyers continue to return to the market with a clearer idea of their budgets,” she said.
According to the report, Sydney’s clearance rate was up for the fourth consecutive month, the first time since March 2021 that there has been this number of consecutive increases.
Sydney’s clearance rate is now above 60 per cent for the first time in eight months, although clearance rates continue to trend lower annually, down 6.1 percentage points.
Melbourne saw a minor decline in its clearance rate, after three months of increases.
This is the fourth successive month above 55 per cent for Melbourne, although it remains 6.1 percentage points lower annually.
Brisbane’s clearance rate jumped 7.9 percentage points in November to 43.8 per cent, the largest monthly increase since April 2021 and its best performance since June.
It continues to see the biggest annual decline of the capital cities, driven by last year’s strong property market and unusually high clearance rates.
Brisbane is a less auction-centric market so clearance rates can vary considerably and the recent run of clearance rates is consistent with the historical standard.
Adelaide continues to be the best-performing capital city, recording the highest clearance rate of 64.9 per cent.
It is the first time since November 2020 that clearance rates have improved for four months in a row, however, it is still following the broader slowing trend, falling annually by 2.4 percentage points.
While Canberra’s clearance rate decreased in November to 54.3 per cent, showing the lowest rate after Brisbane.
This was the weakest run of clearance rates since July 2019, showing the impact of a weaker property market and has a significant annual fall, down 25.1 percentage points.
The expected seasonal spring lift in auction volumes occurred in all capitals, apart from Melbourne and Brisbane.
House clearance rates outperformed units in Sydney, Melbourne and Adelaide while in Brisbane and Canberra unit clearance rates performed better.