Australia’s auction market boomed over the weekend, despite high volumes of listings.
The national preliminary auction clearance rate rose to 76.2%, up from 73.9% the prior weekend. This is the highest preliminary clearance rate since the first week of June last year, according to CoreLogic.
Melbourne hosted the most auctions, with 618 homes put up under the hammer. It recorded a preliminary clearance rate of 73.1%, which was the highest result since mid-July last year.
Sydney was not far behind, with 618 auctions and a preliminary clearance rate of 80.4%, the highest result since the week ending October 24, 2021.
“The newfound strength in auction markets is a radical turnaround from the December results last year, where the preliminary capital city clearance rate fell to the mid 60% range while final clearance rates dropped to the mid 50% level”, noted CoreLogic Research Director, Tim Lawless.
“The early part of the year can show some seasonality, however, with both the volume of auctions and the clearance rate coming in high over the past two weeks, it looks like the year has started with a much better fit between buyer and seller pricing expectations”.
“Stronger auction outcomes could be reflective of a boost in sentiment as expectations of an earlier than expected interest rate cut become more widespread”, Lawless said.
While the auction market has begun the year red hot, the below chart from Justin Fabo at Antipodean Macro suggests that price growth has fallen sharply across Melbourne and Sydney, when adjusted for seasonality:
Thus, the boom in auction clearances could be a case of vendors capitulating and meeting buyers at lower offers.