Industry NewsNationalReal Estate Industry News

Clearance rate weighed down by withdrawn auctions

In what would have been one of the busiest weekends of the year, over 3000 properties were slated to go under the hammer this weekend. But according to CoreLogic 45 per cent were withdrawn from sale and a further 84 per cent of auctions sold prior to the event, resulting in a preliminary clearance rate of 48 per cent.

It comes off the back of last week’s final figure of 37.3 per cent – the lowest final clearance rate recorded since CoreLogic commenced auction reporting in 2008.

On Sunday, CoreLogic reflected “the pre-Easter weekend didn’t quite live up to expectations” as the industry set about establishing a new normal against the backdrop of COVID-19 social restrictions and plummeting consumer confidence.

“The last two weeks had more than 6000 properties scheduled for auction, with anticipation high as confidence was returning to the market and home values were rising,” CoreLogic said.

“However, a rapid change of conditions and plunging confidence related to the impact of COVID-19 has changed the auction landscape with less than half of these homes selling.

“There were 3092 capital city homes scheduled for auction this week, returning a preliminary auction clearance rate of 48 per cent.

 “Unsurprisingly the rate of withdrawn auctions remained high this week, with 45 per cent of the auctions set to take place returning a withdrawn result.”

They noted withdrawn auctions typically comprise less than six per cent of all auctions week to week.  

“As the week’s progress it’s highly likely scheduled volumes will be substantially lower as vendors either convert their listings to private treaty method or hold off on selling their property until selling conditions and confidence levels improve,” CoreLogic predicted.

In Melbourne, 1248 homes were scheduled to go under the hammer this week, returning a preliminary success rate of 54.7 per cent, while last week there were 1565 auctions returning a final clearance rate of 37.6 per cent. 

“The clearance rate was heavily impacted by 40 per cent of auctions withdrawn from the market,” CoreLogic noted.

“Eighty-nine per cent of successful Melbourne auctions were actually sold prior to the auction, indicating buyer demand remains high for appropriately priced properties.”

In Sydney, 1437 auctions were scheduled, returning a preliminary clearance rate of 46.9 per cent.

In comparison, there were 1279 auctions held over the previous week and the final auction clearance rate was 40.3 per cent. 

“Similar to Melbourne, the clearance rate was skewed lower by a large proportion of withdrawn auctions – 45 per cent of scheduled auctions didn’t proceed,” CoreLogic said. 

Of those auctions that were successful, 84 per cent were sold prior to the scheduled auction event.

“As we noted last week, the number of auction results collected at a preliminary stage are lower than usual as we seek to confirm the status of scheduled auctions, however, as remaining results are collected we expect the number of withdrawn auctions to rise and the final clearance rate to adjust lower.”

Domain numbers

Domain’s statistics reflected a similarly deflated sentiment in the market. Of the 2776 properties listed for auction nationally, 1483 were withdrawn from sale, while 817 sold, resulting in a clearance rate of 34.4 per cent.

That was roughly on par with last week, when 2729 properties were listed, 1556 were withdrawn and 885 sold, equating to a clearance rate of 34.4 per cent.

In comparison, during the same weekend last year 1592 properties were listed, just 181 were withdrawn and 779 sold, resulting in a national clearance rate of 50.9 per cent.

In terms of capital cities this weekend, Sydney saw 1228 properties listed for auction, 595 were withdrawn and 413 sold, resulting in a clearance rate of 39.4 per cent with a median house value of $1.354 million.

Melbourne’s figures were slightly more subdued with 1268 properties listed for auction, 769 withdrawn, 343 sold, resulting in a clearance rate of 30.5 per cent and a median house value of $863,000.

Ray White results

Ray White also reported a clearance rate in the 30s, but noted members continued to hammer out deals and the campaign clearance was more than 10 per cent higher than it was a year ago in the weeks heading into the Federal Election of 2019.

“Nationally, Ray White auction agents cleared 33 per cent of all stock under the hammer today but the campaign clearance number climbed to a healthy 57 per cent once all the sold priors were accounted for in this week’s tally,” they said.

“In the virtual world, the group had 2.8 registered bidders per lot with most buyers reporting how much they loved the ability to bid from the comfort of their own home.”

Ray White Group Managing Director Dan White said it was no surprise the network had fewer properties proceed to auction, with lower clearance rates.

“It was understandably a more challenging week,” Mr White said.

“However, there were plenty of great results recorded for our customers across the country, and overall registered bidder numbers were consistent with recent weeks.

“We know that we will need to work twice as hard for our customers in the weeks ahead to deliver the results they deserve.”

NSW

Ray White New South Wales Chief Auctioneer Alex Pattaro said the ‘new normal’ online auction platform had been a tremendous success.

“Buyers certainly aren’t afraid to participate in the new digital world and are willing to transact, of course subject to the vendor’s expectations,” Mr Pattaro said.

“Our strong auction campaign clearance rate is clear evidence that buyers are looking to secure properties prior to avoid further competition.

“We were still averaging a preliminary figure of three registered bidders per auction and this highlights that buyers are out there looking to secure property right now.”

Victoria

This week marked the first that Ray White Victoria conducted 100 per cent of auctions online, with Ray White Victoria/Tasmania Chief Auctioneer Matt Condon also proclaiming the event a success.

“Although the auction landscape has changed, it’s great to see so much of the atmosphere, emotion and competition that we’ve been used to at an on-site auction transfer seamlessly into the online space,” Mr Condon said.

“Today, one thing that was very noticeable was that registered bidders were slightly hesitant to start the auction. However, once bidding started, momentum quickly picked up with buyers actively bidding to secure their desired property.

“Again, when a property was announced on the market and selling, we continued to see bidding and competition past that point, and most importantly, we’ve seen some exceptional results today achieved for our clients in a safe environment.”

Queensland

Ray White Queensland Chief Auctioneer Mitch Peereboom said it was an incredible week, with members across the state embracing the ‘new normal’ online auction platform.

“We certainly didn’t see the innovation deterring any buyers who wanted to bid and wanted to be involved in our auctions this week,” Mr Peereboom said.

“Incredibly, 4.3 is our preliminary average number of registered bidders per property, and this was with our buyers, sellers, agents and auctioneers all in separate locations.

“The platform is indicating to us that sales aren’t going to stop moving through, and as we keep our finger on the pulse of what’s happening out there, the results are most definitely still there thanks to the hard work between our members and clients.”

South Australia

It was all happening in South Australia where Ray White Glenelg/Plympton Sales Consultants Samuel Paton and Christopher Jenman sold 2 Gratton Street, Brighton for $915,000 to a local family after a mammoth 50+ private inspections.

There were a whopping nine registered/active bidders who kicked off the online auction at $750,000.

“This really was a terrific auction with nine registered bidders – four of whom competed rigorously throughout to push the price up from $750,000 to $915,000,” Mr Paton said.

“I understand people feel like they should hold off at the moment but it really is a fantastic time to sell – with stock constraints the competition is more fierce than ever before.

“Eight bidders missed out on this property so there are buyers out there who are cashed up and ready to go right now – the serious buyers are still engaging us strongly.

“We’ve focused all our energies on getting the best price for our vendors for the stock we do have and I have to pay tribute to our auctioneer Rod Smitherham who really went the extra mile this week in taking the bidders through the platform to ensure they were comfortable.”

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