This week proved the second busiest for auction activity in 2020, however the preliminary clearance rate took a hit as a result of continued uncertainty around COVID-19.
According to the latest figures from CoreLogic, this weekend saw 2,539 homes taken to auction across the combined capital cities, returning a preliminary auction clearance rate of 61.3 per cent.
Although the clearance rate dropped compared to recent highs, CoreLogic noted it was still substantially higher than a year ago when values were falling.
“In comparison, the previous week saw 2,274 homes taken to auction returning a preliminary auction clearance rate of 70.6 per cent, before revising down to a final clearance rate of 65.3 per cent.
“While the clearance rate has fallen, it remains stronger than this time last year when 1,667 homes were taken to auction and a clearance rate of 50.9 per cent was recorded.”
In another possible indicator of changing sentiment, the rate of vendor withdrawal saw a rise.
“This week’s preliminary auction results mark a turning point in buyer and seller sentiment, with withdrawal rates rising as vendors think twice about testing the market and buyers losing confidence or choosing to avoid public gatherings,” CoreLogic said.
“Prior to this weekend, the year to date withdrawal rate across the preliminary reading was averaging around 5 per cent across the combined capital cities, rising to just over 8 per cent on today’s numbers.
“The largest proportion of withdrawals was in Sydney where the early numbers indicate 13.5 per cent of auctions were pulled from the market, compared with only 3.9 per cent across Australia’s largest auction market, Melbourne.
“In all likelihood we will see more vendors choosing to withdraw from the market until confidence and selling conditions improve.”
CoreLogic noted the latest results highlight the housing market is being impacted by the social distancing measures and weaker confidence related to the coronavirus pandemic.
“To date there is no evidence of reduced housing values, however it is clear that transactional activity will be temporarily disrupted in the coming weeks and months. The extent of this disruption depends on how long it takes to contain the virus and for sentiment to recover.”
In Melbourne, a preliminary auction clearance rate of 62.7 per cent was recorded across 1,317 auctions this week, while last week there were 1,201 auctions returning a final clearance rate of 65.6 per cent. One year ago, the clearance rate was 55.1 per cent across 814 auctions.
There were 923 auctions held in Sydney this week, returning a preliminary clearance rate of 64.4 per cent. In comparison, there were 767 auctions held over the previous week and the final auction clearance rate was 68.1 per cent. One year ago, 506 auctions were held and the clearance rate came in at 52.1 per cent.
Across the smaller auction markets, auction volumes increased week-on-week across Brisbane, Canberra, Perth and Tasmania, while Adelaide saw fewer homes taken to auction over the week.
Ray White results
Ray White reported a strong auction market across Australia on Saturday with some very determined and active bidders in the new world of social distancing.
They also recorded a preliminary national clearance rate of 63 per cent of its 338 scheduled auctions, slightly down from last week but well up on the 18-month average.
“The group has been encouraged by the use of its digital registration cards, digital paddles and the uptake of its ‘conscious contact’ campaign while adhering to social distancing rules to assist in flattening the curve,” Ray White noted.
Meanwhile Managing Director Dan White said the most important part of the strong week of activity was that the brand was “able to provide a safe environment for our customers and members”.
“We are operating in a new way yet we are still creating the same competition for our vendors and delivering great outcomes,” Mr White said.
“The housing market is currently holding up extremely well, considering the incredible developments both locally and internationally.
“We aren’t assuming anything and like everyone else, we don’t have a crystal ball.
“But for now, we do know that current market activity, record low interest rates, a strong banking system, and the community’s faith in the housing market, especially in uncertain times, should give all homeowners confidence in the value of their homes.”
New South Wales
Crowd numbers were down slightly in NSW but quality buyers still turned up, according to Ray White NSW Chief Auctioneer Alex Pattaro.
“We saw an average of five registered bidders per auction with three of those active. Ray White has taken great measures to ensure that our open for inspections and auctions are as safe as possible,” Mr Pattaro said.
“Facebook Live and other live streaming platforms are providing an avenue for buyers to watch the real time price action, should they not wish to attend in person.”
Ray White Victoria Chief Auctioneer Matt Condon noted there was an increase in auction volume this week and crowds remain strong yet spread out.
“We noticed buyers were often hesitant but once the auction kicked off, buyers were bidding with strength and confidence,” he said.
“We are continuing to see competitive bidding across the network and it’s great to see so many great auction results for Ray White Victoria.”
In Melbourne, Ray White Carnegie Partner Josh Hommelhoff sold 2/8 Paget St, Hughesdale for $1.170 million in front of a crowd of 30 people.
“There would have been a bigger crowd in normal circumstances for sure,”Mr Hommelhoff reflected.
“I have done back to back open homes from 9am to 4pm with an auction in between and actually only had one person asked about our new protocols. I’ve had good numbers at all my opens today.”
Ray White SA Chief Auctioneer John Morris said crowds, agents and auctioneers may be socially distancing themselves but “buyers are getting down and dirty and making aggressive moves” to ensure lots of properties are selling prior to auction.
“The auctions I have attended today have been great and bidding is prevalent at all of them. We have 26 auctions scheduled for next week. Stay safe, stay healthy and in the words of Mr Spock, live long and prosper,” he said.
In the sunshine state, Ray White Queensland Chief Auctioneer Mitch Peereboom noted this weekend was the first real test of the market to see if there was any effect from the economy but “it did not deter the buyers from bidding and participating at auction”.
“The market is still confident with many great results this week at our midweek auction events with plenty of people still watching too,” Mr Peereboom said.