Auction numbers surge but clearance rates struggle to keep pace
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The Australian property market is experiencing a surge in auction activity, but clearance rates are struggling to keep up, according to recent data from CoreLogic. The week ending 17 September 2023 saw 2,334 homes go under the hammer across Australia, marking a 2.6% increase from the previous week. Despite the uptick in auctions, the combined capitals’ preliminary clearance rate dipped by 0.5%, falling to its lowest point in 20 weeks.
Sydney’s Auction Scene
Sydney led the way as Australia’s busiest auction market, with 941 homes auctioned off. This marked a 4.8% increase in activity but resulted in the city’s preliminary clearance rate dropping to 72.5%, its lowest level in two months. Vendors withdrawing their properties from the market were largely responsible for this dip. Nearly 16% of the city’s 748 results collected so far were withdrawn, up from 10.4% the previous week. However, the number of properties passed in at auction fell to its lowest level in nearly two years, standing at 11.8%.
Subregional Performance in Sydney
The Northern Beaches recorded a preliminary clearance rate of 88.5% from 67 auctions, making it Sydney’s strongest performing subregion. On the other hand, the Central Coast was the poorest performer, with only 46.7% of its 18 auctions ending successfully.
Melbourne’s Auction Dynamics
Melbourne’s auction volume dropped below 1,000 for the first time in four weeks, with 982 homes going under the hammer. Of the 789 results collected so far, 69.6% ended successfully. The city’s inner east was its strongest performing subregion, recording a 76.8% preliminary clearance rate from 126 auctions. Melbourne’s west was the weakest subregion, with 63.6% of its 105 auctions ending successfully.
Smaller Capitals
Among the smaller capitals, Brisbane and Canberra reported activity increases of 31.1% and 14.6%, respectively. Auction levels held steady in Perth but fell by 3.1% in Adelaide. Brisbane was the busiest of these markets, hosting 173 auctions, followed by Adelaide with 123 and Canberra with 102. Adelaide held the most successful auctions among these markets, with a clearance rate of 83.8%, followed by Brisbane at 64.7% and Canberra at 50.6%.
Perth and Tasmania
In Perth, only one of the four results collected so far was successful. No auctions were held in Tasmania during the same period.
The Bigger Picture
The data reveals a complex landscape where auction activity is rising but clearance rates are not keeping pace. This could be due to a variety of factors, including vendor withdrawals and the sheer volume of properties going to auction. The dip in clearance rates, especially in major cities like Sydney and Melbourne, could be a sign of market fatigue or a recalibration of expectations among buyers and sellers.
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While the auction market remains active, the declining clearance rates could be a cause for concern for sellers and could indicate a shift in market dynamics. As the spring property season continues, it will be interesting to see how these trends evolve and what they mean for Australia’s housing market.