Auction clearance rate holds as results go missing

By Leith van Onselen

Reported auction clearance rates held firm over the weekend in Australia’s two largest cities, however, the large number of unreported results places a cloud over the reliability of the results.

The Real Estate Institute of Victoria (REIV) reported a provisional auction clearance rate of 6o% on 875 results reported to the REIV. This compares to a provisional clearance rate of 60% initially reported last weekend on 853 auctions, which was later revised down to 59% once late results were chased-up. With 940 auctions initially planned over the weekend, there are a large number of missing results, which will likely lead to the clearance rate being downgraded as further results arrive.

Although this week’s reported clearance rate is once again a bit rubbery, given the high number of missing results, it is still way above the same weekend of last year, where a clearance rate of only 53% was recorded on 882 auctions, and also looks to be a slight improvement on the 57% clearance rate recorded in 2010 on 1,235 auction.

In New South Wales, where auction data is less transparent and accessible, a provisional clearance rate of 62% was reported on 296 auctions by the Real Estate Institute of New South Wales (REINSW). However, there were 235 auctions with “no result”, once again rendering the headline clearance rate next to useless:

To highlight the questionable reliability of Australian auction data (particularly in New South Wales), check out last week’s auction results published later in the week by RP Data after outstanding results were chased-up:

Last weekend’s final clearance rate of 59% reported by the REIV was 6% above that published by RP Data later in the week. Worse, the REINSW’s reported clearance rate of 57% was 11% higher than RP Data’s.

The REIV expects about 920 auctions next weekend.

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.


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  1. To me, and auction is an auction. Something either sells at auction or it doesn’t. What happens prior or subsequently is immaterial. Victoria, with reported auctions of 875 and a clearance rate of 424, is a result of 48.5% to me – not 60% or any other number.

    • Brisbane 29%! Why do people bother?

      In SEQ rural, every auction I’ve monitored has failed. 😯

      • Do we? Conditional contracts of sale ( the benefit of not going to auction!) aren’t definite sales! We don’t know whether any contract will conclude. To me, if it was listed for auction; doesn’t get sold under the hammer – it’s a failed or potentially failed auction process.

        • I can’t agree that “potential” outcomes should be counted in statistics like this. When I sold my property before auction for the highest price achieved for equivalent in the suburb to date (3 years ago now) I certainly didn’t consider it a failed auction process and reckon it would have been deceiving to have it included as a failed auction when calculating the clearance rate.

          • innocent bystanderMEMBER

            totally agree.
            the auction process should be regarded as ‘part’ of the overall marketing process.
            the cynic in me says it is promoted by agents to guarantee at least some fees regardless of a sale.
            in a pure sense auctions are only required for properties that are hard to value, for whatever reason – unique, fast moving market (either direction) …

            don’t buy, at auction, now

        • I agree Janet. Properties sold prior to auction should not be included in the auction figures. Furthemore, as there is a cooling off period (3 days?), the weekend auction results should not be released prior to Thursday of the following week. This would also eliminate the excuse of auctions with no result as there would be ample opportunity to obtain all of the data.

          • So you agree that properties sold prior to auction aren’t included on sale side, but should be included in the totals to calculate the clearance rate e.g. properties sold prior to auction contribute toward lower auction clearance rate?

          • Just saying, you may have concluded a sale as a result of a marketing programme that included an auction event as the last act. But don’t you know friends who’v ‘sold’ before auction, only to fail at the ‘finance clause’ hurdle? I do! And then what? Another couple of weeks/ moths of auctioneering, or a resigned “For Sale” effort. Unless it sells under the hammer, I don’t believe it’s possible to include or exclude it from any set of stats. Hence, it’s ‘not sold’ at auction.

          • I agree it shouldn’t be included as sold at auction, but the sold before auction sales should come off the total as well, otherwise they are skewing the clearance rate when we don’t know what the result was…

          • A sale prior to auction under auction conditions should be counted for what it is. A sale.
            Whether it is the first day of the campaign, the day before the auction, sold under the hammer or negotiated on the auction day. Any of these scenarios I believe are a successful campaign.

          • RW – well actually no, that would be a “sale”, but not necessarily “auction”. The usefulness of auction clearance rates (even if the quality of data is questionable) is as a barometer of consumer psychology.

            Also, just to point out, the statement that “Any sale = successful campaign” is a bit silly….really depends on which side of the trade you’re sitting. RE agents of course get their clip regardless of price and value delivered to vendor.

          • How bizarre when a Sales driven business argues over the process mechanics and not the true objective which is Sales … can marketing puffery/sentiment be that important in the housing market then?


  2. Clearly some sources of information have lost their credibility at this point.

    We could forgo what would seem to be the more timely information of the sprukers choice, in favor of something close to reality. I would love to see an article on the disconnect between RE motivated info and more objective reporting.

    There’s spin and then there’s down right lies (note I’m not even giving the option of misleading here) Brisbane under 30% is still generous imo but again this is capital city data only. I think we should black ball REIV

    Normal volumes for this area are over double, comments from an RE friend of mine indicate possibly the highest number listed for sale in 20yrs and mortgagee sales are the same.

  3. I got along to a couple of Auctions this weekend. One was in the Maxx Apartments in St Kilda that gain infamy went it featured in the Age back in July when they were having a mega sale.

    The one for auction was a two bedroom with a decent bay view. It sold for an undisclosed amount after passing in for $525,000 (which I suspect might have been only a little less than the sale price). Only three parties at the auction (including me and the owner of the dog) and only one bid.
    The apartment block has only been liveable for six months, so the owner clearly held just long enough to get the FHBG and must have been a very keen seller as it was clearly going to make a loss.

  4. A neighbouring house in Melbourne (Ivanhoe) was up for auction on Saturday and even though I wasn’t there I notied that there was no “sold” sticker on the poster. I check afterwards and it is now up for private sale… It was not listed in results on Sunday (The Age).

    This particular property is quite old and even the ad calls it an “opportunity” and possibly a knock-down and rebuild. Yet the seller still wants $1.285M (it’s just over 1000sqm of land).

    • I too attended an auction on the weekend that did not sell and was missing from the APM auction report on the SMH website. The property was a rennovated 3 bedder on approx 1000sqm on Sydney’s North Shore.

      When the auctioneer asked for bids I was greeted by the beautiful sounds of a warm Sydney summer afternoon – cicadas and birds singing. Of course the auctioneer couldn’t help himself and had to pollute the local environs with his babble about the magnificent opportunity the property in question presented. Once the vendor bid ($1.4m) had failed to attracted any further bids it was passed in. I overheard the Agent say to someone that this is how auctions go these days -few are willing to bid publicly so they run an auction after the auction. He went on to say that they get all interested parties into different rooms in the house and bounce from room to room working each of them over trying to extract a bid suitable to the vendor.

      I drove passed the house this morning and there is still no sold sticker on it.

      Dont rely on anyone for information in this industry. No one can be trusted. Do your own research and do plenty of it.

  5. Almost complete radio silence on the Mary Valley Auctions held on Saturday in Bris. After a flurry of puff pieces in most media in the lead-up only 3 of eight properties sold and those were a significant discount to the 2006/7 prices.

    Maybe PF can assist with his Sunny coast connections?

    • My understanding is that the Qld Govt is desperate to get rid of these and nearly 500 properties in the Mary Valley.

      What happened to the 5 that didn’t sell? No bids? Didn’t reach reserve? one of the properties (which ranged from 2 to 12 ha. with houses) went for less than $200k!

    • The Pat – I assume those are the resumed properties bought for the Mary River Dam – they will almost all be large farms wouldn’t they?

      Most auctions in Qld succeed before or after the auction not during the auction process istelf. Qld buyers get more certainty in a standard contract that buyers in other states, so we are less keen to buy at auction. I think that you will have to give the properties at least a month before you can make any judgements on the success of the auction.

      If Victoria had our contract system, very few would be auctioned. that’s an important point when you look at the auction results and compare states.

    • Information still hard to get on this. Is it too much to ask for some transparencey in govt land sales?

      “The highest paid was $361,000 for 4 ha including a house and dam”

      A former owner said “I’ve come down to see what the properties sell for, because it has certainly dropped from what they paid us, I’d say it would be back to one third of what they paid us.”

      That is 1/3 the price the state govt paid in 2006/7!

  6. As Janet said, lets just now say that if it didn’t sell that day it’s not included as a sale.

    If enough people push this idea it will become the standard. We don’t need REIV etc… to set standards for us.

    • that would imply some kind of democracy to reporting methodology. The REIV aren’t interested in that. They will spin the numbers as hard as possible, pass if off to real estate agents as information, which is then passed onto the poor, unsuspecting mum & dad investors as “fact”.

      Integrity of agent* or data doesn’t tend to sell a hell of a lot of houses.

      *cynical as I am, I’m sure there are some decent agents out there. I’ve met a few who seem like good guys; their failure is in believing the crap coming from the likes of REIV, APM, Henry Kaye….

  7. The RP Data December 2 graph correctly measures the pulse. This market is in febrile convulsions. AND we’ve had 175 basis points of interest rate cuts to defibrillate and restore sinus rhythm.

    Don’t Buy Now!

  8. “it’s bit hard to sell at auction if only one bidder turns up”

    A friend’s comment after the second failed auction of their suburban Sydney home (500m to heavy rail to the city) which they want to sell so they can downsize to a newly built (almost finished) over 55’s apartment.

    • Being the only one makes you feel a bit awkward; you end up bidding against the vendor which is just crazy.

      Something is only worth what you can sell it for. If a owner of BHP shares wanted to sell their shares at $45 each at the moment, they clearly aren’t going to be selling any time soon. But a owner of a house is dumbfounded when they can’t get a price the market is not willing to accept.

  9. The REINSW and REIV do not include any withdrawn auctions in their final calculation of clearance rate.
    RPData do include withdrawn auctions.
    In NSW recently more than 10% of auctions have been withdrawn.

  10. Perth this weekend, attended an Austion. A mortgagee sale.

    Advertised for about 4 months at $1.1mill. South side with good river views. 4 bed 2 bath. Built last 4 years. SOLD under the hammer for $710,000.00

    Houses in this area of same vintage, size and outlook are listed around 1 mill.


    • But mortgagee sales don’t count; they get excluded from the statistics, because there’s no willing seller involved in the process. Now me, I reckon a mortgagee sale is about as accurate an indication of what market price really is! But what do I know…..

      • Agree Janet. And as these sales grow- and I see they are around my area- they increasing reflect the absolute strength of trend locally. That 30 odd % reduction in the ask is a death knell in this area. As the mortgagee sales increasingly become “the volume”, as I am certain they will, RE Agents will do the necessary “pereception management” to get the sales.

  11. For NSW there looks to have been 580 Auctions organised by agents during the week with a total of 115 (19.8%) having actually being posted as SOLD at auction (what % of those fall-over post sale?)

    That’s a fair way short of the spruiker PR line of 62%.

  12. A question I have about these auction clearance rates is how we can use them to understand broader performance in the market?

    It’s not clear to me that a higher auction clearance rate is per se a good thing (naturally it is for sellers if prices are maintained). But what about in the current environment of deteriorating prices? Could a lower auction rate be a positive sign that sellers are maintaining price levels at the expense of turnover?

    Or to flip it, if we see the sudden crash that many here have been anticipating, will that be accompanied by a sudden spike in the clearance rate as sellers finally capitulate to lower prices?

    Any guidance/thoughts would be much appreciated.

    • thomickersMEMBER

      most can’t handle taking a capital loss but can accept having to pay for a large interest expense bill (tax effective apparently…).

      • ahaaa ….. astute comment, I hadn’t thought of that point of view.

        Great thread, very very informative comments here, I am earning a LOT from everybody (and so pleased I helped a young employee decide NOT TO BUY a year ago !!).