Spring awakening: why more auctions are leading to record success rates

The Australian property market is buzzing with activity as the spring selling season gains momentum. According to new data from CoreLogic, over 2,200 homes went under the hammer in the week ending 10 September 2023. This represents a 19.1% increase compared to the same week last year. The preliminary clearance rate also rose for the third consecutive week, reaching 71.7%.

CoreLogic suggests that the increase in successful auctions is due to a decline in the number of properties passed in at auction, which fell to its lowest level in 18 months. Additionally, the withdrawal rate among vendors increased by nearly 2% to 9.5%, indicating a more cautious approach.

Melbourne continues to be a hotspot for auction activity, with over 1,000 homes going under the hammer for the third consecutive week. Out of the 790 results collected so far, 71.5% ended successfully. The city’s inner east emerged as the strongest performing subregion, boasting an 80.5% success rate from 147 auctions. In contrast, the Mornington Peninsula was the poorest performing area, with just over half (53.9%) of its 19 auctions ending positively.

Sydney is not far behind Melbourne in terms of auction activity. Last week, 907 homes were auctioned off, which is approximately 30% higher than the same period last year. Of the 698 results collected, 73.4% were positive. The inner south-west of Sydney was the strongest performing subregion, with an 85.5% success rate from 98 auctions. Sutherland, however, lagged behind with a preliminary clearance rate of 57.1% from 38 auctions.

Adelaide experienced its busiest week since late April, with 130 homes going to auction, representing a 26.2% increase from the previous week. Despite this surge, Brisbane narrowly outpaced Adelaide with 132 auctions. In Canberra, 90 homes went under the hammer. Among the smaller capital cities, Adelaide had the highest preliminary clearance rate at 88.9%, followed by Brisbane at 59% and Canberra at 53.2%.

Perth saw limited auction activity, with only four of the 13 auctions held last week ending successfully. Interestingly, no auctions were conducted in Tasmania during the same period.

Looking ahead, CoreLogic reports that 2,450 auctions are scheduled to take place across the combined capitals next week. This signals a continuation of the strong momentum that has characterised the opening weeks of this year’s spring selling season.

The data paints a picture of a property market that is both vibrant and increasingly competitive. With clearance rates on the rise and more homes going under the hammer, it appears that both buyers and sellers are eager to make the most of the favourable conditions. However, the increase in withdrawal rates suggests that vendors are becoming more cautious, possibly due to concerns about market stability or changing economic conditions.

While Melbourne and Sydney continue to dominate the auction scene, smaller capital cities like Adelaide and Brisbane are also experiencing significant activity. This broad-based participation indicates a healthy market, but also raises questions about the sustainability of such high clearance rates, especially as more properties are scheduled to go to auction in the coming weeks.

As the spring selling season continues to unfold, it will be interesting to see if these trends hold, or if the market will experience a correction. For now, the property market seems to be enjoying a spring awakening, with more auctions leading to more success.