CoreLogic has released its Q4 Auction Report, which shows the market booming as 2020 drew to an end:
CoreLogic’s Auction Market Review for the December quarter 2020 saw the combined capital city clearance rate continue to strengthen, while auction volumes increased by 44 per cent over the same period.
The combined capital city clearance rate was recorded at 69.4 per cent over the December quarter, making it the best performing quarter of 2020, followed by the March 2020 at 62.5 per cent.
Auction volumes increased by 44.1 per cent over the three months to December, with 20,489 homes taken to auction across the combined capital cities, up from 14,216 over the September quarter.
CoreLogic’s Head of Research Australia, Eliza Owen, says the bulk of this uplift can be attributed to Melbourne.
“65.2% of the uplift can be attributed to the resurgence of auctions scheduled across Melbourne. Vendor activity became pent up during stage four restrictions across the city, leading to a delayed flurry of activity. As restrictions eased we saw new listings soar across Melbourne with people looking to sell, and last year the seasonal drop off in auction activity happened about a week later than we would typically expect, as agents tried to keep up with vendor demand.
“While the three months to December was the busiest quarter of 2020, it was significantly lower than the December 2019 quarter, when 26,923 homes were taken to auction across the combined capitals.
“Based on the momentum that was building in the market towards the end of 2020, along with strong selling conditions and record low interest rates, we would expect auction results to continue on a strong footing into 2021 as volumes ramp up, providing there’s no major resurgence of COVID19 in the community which would serve to dampen the momentum building late last year,” says Ms Owen.
Of the 20,411 auction results collected over the latest quarter, just 8.9 per cent reported a withdrawn result, compared to 18.7 per cent over the September quarter and 31.0 per cent over the June quarter. Of the sold results, 36.8 per cent were sold prior to auction, compared to 42.0 per cent over the September quarter and 47.8 per cent over the June quarter.
Auction clearance rates have historically been a solid leading indicator for property prices in Sydney and Melbourne (but should be viewed alongside mortgage commitments):
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As shown above, the rebound in auction clearances points to higher property price growth in Sydney and Melbourne.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
