Auction market ends 2021 in the gutter

Australia’s auction clearances have fallen heavily after weeks of record listings:

Last weekend’s final auction clearance rate was 61.1%, down from 64.0% the prior weekend off a near record 4,783 auctions (down from 4981 the prior weekend):

As noted by CoreLogic:

Historically we would see auction activity start to taper off in the lead up to Christmas, with volumes falling dramatically after the second week of December. However, last week defied this convention with 4,783 auctions held across the combined capitals. Beaten out only by the 4,981 auctions held the week prior, last week overtook the week ending 28th November as the second busiest since CoreLogic records commenced in 2008. Continuing the downward trend seen since early October, the capital cities clearance rate fell this week with 61.1% of auctions held returning a successful result. The week prior recorded a clearance rate of 64.0%, while this time last year 69.8% of the 2,331 auctions held were successful.

Last week, 2,161 auctions were held across Melbourne, down from the record high 2,318 that occurred the week prior. Last week was the second busiest auction week on record and marked only the 3rd time that Melbourne’s auction volumes exceeded 2,000. The Melbourne clearance rate fell further last week, with 60.0% of the auctions held recording a successful result. The week prior recorded a clearance rate of 63.3%, while this time last year 69.4% of the 1,182 auctions held were successful.

Across Sydney, 1,634 homes were taken to auction last week, making it the second busiest week on record, behind the week prior. Compared to the previous week, volumes were down 8.8% (1,791) but were more than double the volumes recorded this time last year (764). With auction activity remaining high despite the approaching holiday season, Sydney’s clearance rate fell to 57.0% last week – it’s lowest since early June 2020 (56.8%). The week prior recorded a clearance rate of 60.8% while this time last year 72.0% of auctions held were successful.

Across the smaller auction markets, Adelaide (344), Brisbane (354) and Canberra (255) all outperformed the week prior, becoming the busiest week on record. Canberra recorded the highest clearance rate at 73.7%, followed by Adelaide (73.5%) and Brisbane (67.3%). In Perth, 17 of the 32 auctions held were successful (53.1%), while Tasmania hosted three auctions last week, and none of these recorded successful results.

This year has been a record-breaker for auctions, recording the busiest capital city auction year on record (with 116,711 auctions held in the year to date), the highest capital city clearance rate on record (83.2% week ending 3rd October 2021) and the four busiest auction weeks since records commenced in 2008 (weeks ending 28th November to week ending 19th December). With auction activity remaining strong through December, it will be interesting to see if this volume is matched in 2022 following the unusual seasonal slowdown.

The next chart plots the sharp fall in auction clearances:

The sheer weight of volumes has tempered price growth across Melbourne and Sydney.

Unconventional Economist
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