This week saw the lowest preliminary clearance rate recorded since July last year, with only 63.3 per cent of the 1977 auctions scheduled for this week proving successful.
The volume of auctions that forged ahead was also lower than anticipated, revising down from 2106 after a number of vendors rescheduled to a later date.
Last week saw a lower 1822 homes taken to auction across the combined capitals, while there were 1064 auctions held this time last year.
In comparison, last week’s preliminary clearance rate came in at 72.3 per cent, revising down to 70 per cent at final figures, while this time last year, 60 per cent of reported auctions were successful.
CoreLogic noted, with Sydney maintaining a preliminary clearance rate above 80 per cent for the fourth consecutive week, the drop in this week’s clearance rate is largely attributed to the surge in withdrawals in Melbourne.
There were 1067 auctions held across Melbourne this week, revising down from the 1179 originally scheduled, meaning around 9.5 per cent were rescheduled to a later date.
Last week, 884 homes were taken to auction, while there were 222 auctions held this time last year.
Of the 792 results collected so far, 49.9 per cent were withdrawn, weighing heavily on the preliminary clearance rate which came in at 48.6 per cent.
Of the 385 sold results collected so far, 69.4 per cent were sold prior to auction, which was the highest ‘sold prior’ rate since last week of September 2020.
In comparison, 32.6 per cent of auctions were withdrawn over the previous week and a final auction clearance rate of 59.9 per cent was recorded.
Sydney saw 529 properties taken to auction, down from the previous week when 551 auctions were held, and this time last year when 615 auctions took place.
Of the 454 results collected so far, 81.7 per cent were successful, while 13.7 per cent were withdrawn. Just 1.1 per cent were postponed to a later date.
Of the 371 sold results, 61.5 per cent were sold prior to the scheduled auction date.
Last week, Sydney’s preliminary auction clearance rate was slightly higher (82.9 per cent), revising down to 81.3 per cent at final figures.
“Clearly we are seeing a remarkably different outcome in auction results across Australia’s two largest auction markets which can be explained by the fact that properties can still be physically inspected in Sydney (although a private inspection is limited to one person at a time), but not in Melbourne,” CoreLogic said.
“The divergence in the auction clearance rate tells the story about how important it is for prospective buyers to be able to physically inspect a property in order to make such a high commitment decision as buying a home.”
The smaller capitals
Adelaide was the best performing capital city auction market this week with a preliminary auction clearance rate of 87.1 per cent.
Canberra recorded a preliminary auction clearance rate of 78.9 per cent, while Brisbane saw 71.9 per cent of reported auctions record a successful result.
Domain also reported a clearance rate that was shy of two thirds, with their records indicating 1943 properties went to auction in the major markets and the success rate was 62.3 per cent.
So far, results are in for 1194 of those auctions, with 744 properties selling (to the value of $638.8 million), while 421 properties were withdrawn.
Last week the final clearance rate came in at 67.3 per cent after 1876 properties were taken to auction.
Results were provided for 1323 of those auctions, with 890 properties selling (to the value of $716.5 million), while 357 properties were withdrawn.
This time last year, the clearance rate was 62.6 per cent after only 655 properties were taken to auction.
Results were provided for 642 of those auctions, with 402 properties selling (to the value of $479.1 million), while 114 properties were withdrawn.
Like CoreLogic, Domain noted Sydney’s clearance rate continues to defy the national trend, despite ongoing lockdowns.
This week 412 properties were taken to auction in Sydney, resulting in a preliminary success rate of 85.2 per cent.
So far, results are in for 332 of those auctions, with 283 properties selling (to the value of $331.8 million), while 40 properties were withdrawn.
Last week, Sydney’s final clearance rate settled at 80.2 per cent after 472 properties were taken to auction.
Results were provided for 414 of those auctions, with 332 properties selling (to the value of $338.1 million), while 57 properties were withdrawn.
This time last year Sydney had 425 properties go to auction and the clearance rate was 65.5 per cent.
Results were provided for 412 of those auctions, with 270 properties selling (to the value of $370.5 million), while 57 properties were withdrawn.
Melbourne’s preliminary clearance rate plummeted this week due to a high withdrawal rate.
Domain reported 1273 properties were slated for auction, resulting in an initial success rate of just 47.1 per cent.
So far, results are in for 699 of those auctions, with 329 properties selling (to the value of $215.2 million), while 368 properties were withdrawn.
Last week, Melbourne’s final clearance rate settled at 56.1 per cent after 1141 properties were taken to auction.
Results were provided for 710 of those auctions, with 398 properties selling (to the value of $281.1 million), while 282 properties were withdrawn.
This time last year, only 113 properties were taken to auction in Melbourne and the success rate was 53 per cent.
Results were provided for all auctions, with 61 properties selling (to the value of $55.2 million), while 47 properties were withdrawn.
Ray White results
Lockdowns continue to drag on across Australia, yet the economic data and property market activity continues to be very positive, according to Ray White.
This weekend, the group conducted more than 100 auctions and recorded a preliminary auction day clearance rate of 87.7 per cent, with 8.9 average registered bidders and more than half of them active in the bidding.
“The bidder metrics remain off the charts despite the all-time low volume of stock making it to auction,” the group stated.
“Online auctions in New South Wales and Victoria once again proved no obstacle with buyers comfortable with the seamless format and in fact many actually prefer it.”
On Saturday, happy Ray White sellers across Australia were rewarded with 15.55 per cent more under the hammer than their highest offer prior, which they explained was an all-time high for the group, and shows the power of creating competition at auction and going all the way to game day.
White Chief Economist Nerida Conisbee said it was no surprise that international migration continued to show very few people coming into Australia.
“In the June quarter, we saw 59,380 Australian residents returning, however the majority of them were here short term to visit friends/relatives. More Australian residents departed than arrived, although overall we saw slightly more arrivals than departures,” she said.
“The remaining 15 per cent back permanently were mainly from New Zealand, driven by the more relaxed restrictions with travel to Australia.
“With most Australians returning here for just a short time period, and most of them from New Zealand, the expat market for Australia’s premium property is likely to be relatively small.
“But anecdotally, it does appear to be making an impact on some of our more expensive suburbs. It is also likely being driven by expats not quite ready to return but keen to park their money in Australia’s surging property market.
“One observation about wealthy returning expats is that many of them own apartments in nice suburbs, having bought them when they were young and prior to heading overseas.
“On returning, many of them are selling them to upgrade to a big family home in the same suburb. This is leading to price falls for units in these suburbs, but big increases in house prices.
“If this is true, the suburbs our expats are choosing are possibly returning to places like Kirribilli, Dover Heights and Vaucluse in Sydney and Toorak and Brighton in Melbourne. All of these suburbs have seen big jumps in house prices but apartment prices have declined,” Ms Conisbee said.
New South Wales
Ray White NSW chief auctioneer Alex Pattaro was excited to see vendors receiving great results under the hammer, despite lockdown restrictions being extended.
“Another week in lockdown and another successful week of online auctions,” Mr Pattaro said.
“We continue to see strong bidding activity and property prices. As we start to enter the warmer months, there’s no denying that now is a great time to sell.
“The data suggests there is an abundance of buyers, and sellers are gaining 15 per cent better prices under the auction hammer than offers during the campaign. We look to see this trend continue despite the extension of the lockdown.”
In what was more disappointing news, lockdowns were this extended to also cover regional Victoria on Saturday, not just metropolitan Melbourne.
This effectively put a stop to all physical real estate activity – including private inspections – across the state.
Ray White Victoria and Tasmania CEO Stephen Dullens explained the impact this was having on the real estate market.
“The latest restriction announcements are another challenge for our customers across Victoria.
“With such a major financial and family decision as purchasing or renting a home, many customers are understandably hesitant to do this without physically inspecting the property.
“Our data tells us that customers are also hesitant to bring their property to market, preferring to wait for lockdown conditions to ease,” Mr Dullens said.
“We are hearing from more and more customers who have an urgent need to buy, sell or lease property.
“The ongoing restrictions make this extremely difficult and we’d welcome the opportunity to engage with government officials to discuss how we can help these customers while still ensuring the safety of the community,” he said.
Ray White Queensland chief auctioneer Gavin Croft said investors and buyers wanting to move from interstate were driving the market at auction this weekend.
“Today has been a consistently stand-out day right across the board,” Mr Croft said.
“So far today I’ve conducted seven auctions and seven have sold. An obvious note from the competition today has been resurgence of investors back into the market.
“We had a couple of good auction results earlier in the day out in the Redbank Plains region in that Western corridor, particularly from investors looking to seek out those better returns.”
Mr Croft said properties at Northgate and Everton Park attracted buyers looking to move up from Sydney.
“We’re particularly seeing people from those southern states bidding over the phone, and competing,” he said.
“Those interstate buyers were really playing a role here today, as well as the investors.
“Across Brisbane today we’ve seen an average of 4.5 registered buyers per auction, good competition, and investors back in the market.”
Ray White South Australia Chief Auctioneer John Morris said there were 50 auctions scheduled this week, which was approximately 30 per cent of all auctions throughout South Australia which was actually the lowest it’s been all year.
“But that’s the only percentage that is low, the auction day clearance rate sits at 100 per cent with 12.8 registered bidders per auction and 4.3 of those are participating in the auctions.”
The Adelaide auction market continues to fire up this winter which is paving the way for a strong spring selling season.