Auctions tsunami tanks clearance rates

This weekend marked the second biggest volume of auctions since CoreLogic began tracking the market in 2008, with a whopping 4758 homes going under the hammer.

Australia’s preliminary auction clearance rate fell further to 63.4% from 66.6% last weekend – a figure that will likely fall into the low 60s once all results are counted:

According to CoreLogic:

This is the fourth consecutive week where more than 4,000 capital city homes have been taken to auction, something that has never been seen before. The previous week saw 4,981 homes taken to auction… The higher volumes over recent months have seen the preliminary clearance rate continue to trend lower. Of the 3,838 results collected so far, 63.4 per cent were successful, down from the previous week when a preliminary clearance rate of 66.6 per cent was recorded, revising down to a final clearance rate of 64.0 per cent…

Across Melbourne, 2,140 homes were taken to auction this week, the second busiest auction week on record, behind last week which saw 2,318 auctions held across the city… Of the 1,778 results collected so far, 62.3 per cent were successful, down from last week’s preliminary clearance rate of 65.3 per cent which revised down to a final clearance rate of 63.3 per cent…

There were 1,631 Sydney homes taken to auction this week, and like Melbourne, this was the second busiest auction week on record (tied with w/e 30 November 2014). The previous week saw a record breaking 1,791 homes taken to auction… Of the 1,315 results collected so far, 60.8 per cent were successful, in line with last week’s final clearance rate, which had revised down from a preliminary clearance rate of 63.6 per cent. This means that it is more than likely that Sydney’s final clearance rate will fall below 60.0 per cent for the first time this year when the remaining results are collected…

Across the smaller auction markets, Brisbane (351), Adelaide (345) and Canberra (254) all overtook last week as their busiest auction week since records commenced in 2008…

Including this week’s preliminary figures, there have been 116,684 capital city auctions held over the 2021 year to date, overtaking 2017 as the busiest auction year on record (109,268).

The national clearance rate has fallen sharply from recent peaks:

The above is indicative of a slowing market. A record number of sellers are now seeking to cash in on the record prices while they can. Hence, supply is beginning to overrun demand, pushing clearances lower.

Accordingly, price growth should continue to slow.

Unconventional Economist
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