Vendors have been busy trying to sell their properties before the Christmas break, with capital city auction volumes surging to a 19-month high.
According to Domain’s Auction Report November 2023, auction volumes hit a 19-month high in Sydney and Canberra and a 16-month high in Adelaide in a sign that vendors are becoming more confident.
Domain’s Chief of Research and Economics, Dr Nicola Powell, said the higher auction volumes had also weighed on clearance rates, which fell to 59.8 per cent in November.
“A steady rise in auction listings in recent months, consistent with the spring selling season, has weighed on the strong performance of clearance rates seen in the middle of 2023,” Dr Powell said.
“Increased choice has eased buyer competition and dissipated the sense of urgency evident earlier in the year.”
Dr Powell said the lift in auction listings showed improved seller confidence as the recovery in Australia’s housing market — prices either hitting or close to new records — motivates sellers to list.
“However, the recent performance of clearance rates seems to indicate a more balanced market, providing buyers with greater bargaining leverage,” she said.
In Sydney, the clearance rate fell below 65 per cent in November, ending the longest stretch above 65 per cent seen since November 2021.
Dr Powell said it was the lowest clearance rate recorded in 2023, but remains stronger than most of 2022.
Melbourne’s clearance rate has also fallen, declining for the fifth successive month for the first time since July 2022.
The clearance rate is now at its lowest point this year, but remains high relative to the second half of 2022.
The medium auction price for houses and units saw an annual increase in both Sydney and Melbourne.
Sydney’s median auction house price is $1,695,314, a 1.2 per cent increase monthly and a 3.1 per cent increase annually.
While Melbourne’s median auction house price is $1,068,203, up 1.2 per cent annually.
Looking at the smaller capital city markets and Brisbane’s clearance rate continues to be the softest.
It recorded the biggest monthly decline in November and marks the third month in a row of decreases, the first time this has happened since July 2022.
Dr Powell said the clearance rate was below 50 per cent for the second month in a row, however, this is not unusual, given it is a less auction-centric market, and this aligns with its historical performance.
She said Adelaide continued to be the best-performing capital city, but its clearance rate is below 70 per cent for the second consecutive month.
Clearance rates remain higher annually, up 9.9 percentage points, the largest growth of any capital city.
Meanwhile, Canberra’s clearance rate rose over the month and saw the largest increase of all the capital cities.
It is up over the year by 2.3 percentage points but outcomes remain weak compared to its historical performance.
Dr Powell said after the Christmas break, the test of confidence will come in March as activity ramps back up after the holiday period.
“As we move into 2024, the autumn selling season will be the next big test of the auction market given the normal seasonal bounce that occurs early in the year,” she said.