Auction clearance rates hold firm

By Leith van Onselen

Auction clearance rates held firm over the weekend in Australia’s two major markets.

In New South Wales, a provisional auction clearance rate of 64% was recorded from 430 auctions reported to the REINSW. This compares to a provisional clearance rate of 61% recorded last weekend on 314 auctions, and a year-to-date clearance rate of 61%. The number of homes auctioned was also in-line with the same weekend of last year when 431 auctions went under the hammer.

In Victoria, a provisional auction clearance rate of 62% was recorded over the weekend on 455 auctions reported to the REIV. This compares to a provisional clearance rate of 66% recorded last weekend on 563 auctions, which was later revised down to 63%.

Although this weekend’s clearance rate was above the 55% clearance rate recorded in the same weekend on 2011 (when 517 homes went under the hammer), it was well below the same weekend of 2010, when a clearance rate of 70% was recorded on 680 auctions.

Once again, last week’s auction clearance rates published by the REINSW and REIV – 61% and 63% respectively – were more positive than those reported later in the week by RP Data, where clearance rates of 60% and 58% respectively were recorded for Sydney and Melbourne:

Twitter: Leith van Onselen. Leith is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.

Leith van Onselen


  1. Clearance rates – hold

    Volumes – 10+% down in Vic Yr on Yr.

    The only question now is prices…

    …oh and “What is happening in Darwin?”.

    Bubbley? Go to any auctions on the weekend?

        • How so?

          Try a search on post codes 0800, 0810, 0820. These are the three major post codes in Darwin. Just to get a feel for the place and what a house costs here.

          Population 120,000, surrounded by millions of acres of land, yet housing prices are going up, despite the rest of the country is apparently experiencing a “slow melt”.

          Logic says it should be the same here. Iron ore prices plummeting, price of gas is dropping faster than Fairfax stocks and a recent change to a Liberal razor gang government. Our state economy should be gutted by the drop in mineral prices.

          But its not.

          So it still appears to be an anomaly to me.

  2. Went to 9 open houses and 2 auctions in West Footscray on Saturday. Lots of bargain hunters out and about, few desperate sellers and not a lot on the market still.

    Believe that the next few weeks will tell a story…things on a knife edge. There’s definitely no upside to house prices but there may well be a little more way to go down in Melbourne.

    • +1 on the bargain hunters.

      Spring is a flop for the agents in Williamstown/Newport/Altona. Listings have dried up and those remaining are stale. The question is will buyers turn up, get a little impatient and start to sop up some of that overhang?

      Has anyone elsewhere had a tick up in listings during the approach to spring? Stewart where are you?

      • There were 9 listings for auction a couple of weeks ago Williamstown and Newport… none turned up on auction result listing after weekend….. heard last night that according to real estate insider Williamstown prices are 10-15% off……

        • Even the agents themselves will tell you the ‘official’ data (~ -6%) is garbage. Most of Altona, Altona Meadows and Laverton down 15-25% (nominal).

      • In Canberra, the number of property sales listings on the allhomes website has more or less flatlined in August with around 2700 for sale across the ACT and Queanbeyan. The number of sold properties is flat too at about 450-500 per 4 week period. However, the number of new sales listings has risen during August so you would have expected the number of total sales listings to rise. But not in Canberra where nearly 250 properties for sale were delisted during August.

        I expect total sales listings to start rising in September but only if the number of new sales listings can continue to rise. I don’t think Canberra will experience the same high level of new sales listings in Spring as it did last year. Same story with auctions. Some potential sellers are likely to be taking a wait and see approach and holding off selling because they know they won’t get the peak prices of 2010.

        • Re: Canberra and wait-n-see sellers…

          We were looking for a rental last year in Feb/Mar in Canberra. Being it was our first time renting (lived at home and owned before now) I was hesitant at getting into a 12 month lease. At the time there was maybe 1 house on offer with a 6 month lease, the rest were all the standard 12.

          Fast forward to now, we are looking to move from our possum-infested insulation-free 3/2 and are keen to get a a 12-monther… and a full half of the listing we are looking at are for less then 12 month leases! Many with odd months of availability (2-10 months, 5 months, 2 months, 6 month…). I’ve been chalking this up to people looking to sell in the short term while still wanting rental income.

          Also… rents have come off a good 10-15% in the last 18-ish months. This could also be influenced by the fact that we are not fighting the Uni students this time of year, but observed non-the-less.

          Things are starting to get “interesting” (about bloody time!)

  3. Interested to see numbers of auctions in NSW were flat yoy. That coupled with the reasonable clearance rate is a pretty fair indicator that things aren’t really horrible out there at this stage I’d say. Now whether you take that as a sign of “prices to the moon!” or “last chance saloon” (for vendors) depends on your belief in the power of financial gravity vs the powers that will no doubt be ranged against it…

    • Agreed that flat is flat – not “really horrible”.

      But where are things headed?

      Consider that the housing bulls were predicting a surge upwards, based on the recent 75 point cuts in interest rates.

      Instead we have flatness, with volumes down.

      (Auction clearance rates measure next to nothing, but volumes are significant).

      Buyers are sniffing the air and it doesn’t smell good.

      And FHBs are not about to step in and “save” the market. For a start, there are barely any left – future demand has already been swallowed up by past incentives. And any who are left are relying on their sense of smell…

  4. It will be interesting to see the effect of the change in the NSW grant arrangements. Will FHBs rush in before for the 30 Sept end of the existing home grant or wait for the 1 Oct increased builders grant?

    Logic would dictate that auctions would have been almost exclusively existing homes?

    Anyone got data on this?

    • Wonder if the $7k federal grant is part of the freeze? Haven’t heard any squealing so presumably not…….yet.

      • Yes, it is – the FHB grant is administered by the states, and NSW will chose to only give it for newly built properties from Oct 1

  5. Being a cynical follower of the “reported results” I will recalculate the clearance rates assuming that the “No Result” numbers are houses that didn’t sell and “postponed and withdrawn” is where no one turned up to bid.
    The results are somewhat different.
    NSW 277 sales from 531 auctions planned gives a clearance rate of

    VIC 284 sales from 506 auctions planned gives a clearance rate of

    Does anyone know how many auctions where advertised for this week?
    Can we trust these reported numbers?

  6. There’s an article on AFR today mentioning the “plea” and “begging” of education industry (including Navitas’s CEO) for immigration to be more “relax” granting visa for offshore students. Seems like the visa factories are panic now and want Australia to have no immigration checking policy on any prospective student from overseas. Probably they should join forces with the real-estate industry’s lobbies because their interests are the same 😉

    “More overseas students please, they’re rich, and stupid enough to always buy properties in Australia at whatever price level.”

    • Where does Property Observer get off in that article stating “Melbourne’s auction clearance rate so far this year at 61% – nothing wrong with that really” – ?

      Here’s what’s wrong with it. First, even 61% success is a dodgy figure with several dozen auctions going missing from the count each week.

      But more to the point, 2 in every 5 sellers are getting nothing in return for the big dollars they paid agents for an auction. (And a chunk of those who got a sale will have ended up accepting a lower sale price than the figure the agent wooed them with on Day 1).

    • That article may help explain the reasonably stable auction clearance rates. People seem to think more critically whether to sell by auction or save some money and go for a private sale.
      I suspect the clearance rates hold up because of that and also due to more realistic vendor expectations.
      It will be interesting to monitor the spring season.