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Auction clearance rates improve across capital city markets

19 October 2020 Bianca Dabu
Melbourne

The combined capital city preliminary auction clearance rate improved this week as volumes rose across major capital city markets, led by activity in Melbourne and Sydney, CoreLogic found.

Data from the latest CoreLogic Property Market Indicator showed that there were 1,134 homes taken to auction on the week ended 18 October 2020, up from the 1,084 auctions held last week.

Of the 878 results collected so far, 72.4 per cent were successful, higher than last week’s preliminary figure of 71.5 per cent, which was revised down to 66.4 per cent by final collection on Wednesday.

Over the same week last year, a final clearance rate of 72.1 per cent was reported across a higher 1,955 auctions in Melbourne.

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Melbourne saw a substantial increase in scheduled volumes this week, with 188 homes taken to auction, up on the 59 auctions last week and the largest number of auctions in two months. Of the 143 results collected so far, 93 were successful and 14 were withdrawn, equating to a preliminary clearance rate of 65 per cent and a withdrawal rate of 10 per cent.

Of the sold results collected, 27 per cent sold prior to the scheduled auction event, which was much lower than the recent trend where a high proportion of auctions have been selling prior to the auction being held rather than under the hammer.

One year ago, 915 Melbourne homes were auctioned, with 73.3 per cent selling.

Meanwhile, Sydney continues to make up over 60 per cent of all auction activity, although volumes were lower over the week, with 707 homes taken to auction, down from the 751 held over the week prior. Of the 560 results collected, a preliminary clearance rate of 75.9 per cent was achieved.

Last week, Sydney’s final clearance rate came in at 67.2 per cent, and this time last year, a final auction clearance rate of 79.2 per cent across 727 auctions was recorded.

Across smaller capital city markets, Canberra saw the higher preliminary clearance rates at 85.7 per cent, with a total of 59 auctions and 49 auction results. During the same time last year, the capital city saw a 62.7 per cent clearance rate with a total of 68 auctions.

Following Canberra are Adelaide, Perth and Brisbane, with auction clearance rates of 70.6 per cent, 55.0 per cent, 54.7 per cent, respectively.

Market activity

Combined capital city home values did not move over the week ended 18 October 2020, but declined by 0.1 of a percentage point over the month. Looking over the past 12 months, combined capital city home values increased by 4.0 per cent.

Across major capital cities, Adelaide saw the highest increase in home values at 1.0 per cent over the month (28 days), followed by Brisbane at 0.2 of a percentage point and Perth at 0.1 of a percentage point. On the other hand, Melbourne and Sydney declined by 0.6 of a percentage point and 0.2 of a percentage point, respectively.

In terms of supply and demand, the number of new listings across combined capital cities declined by a 10.8 per cent over the year to 23,283, bringing the total number of listings to 82,913 — a decrease of 14.8 per cent from the same period last year.

Despite listings declining by 8.4 per cent and 6.9 per cent over the past 12 months, respectively, Melbourne and Sydney still recorded the highest number of total listings at 21,072 and 20,695.

Brisbane and Perth follow, with total listings declining by 15.6 per cent to 17,201 and 1.7 per cent to 14,764, respectively.

Adelaide (-28.5 per cent), Canberra (-21.4 per cent), Hobart (23.7 per cent) and Darwin (-15.6 per cent) recorded total listings of 5,833, 1,868, 812 and 668 properties, respectively.

As of 18 October, Melbourne, Brisbane, Perth and Darwin saw the highest time on market for houses at 73 days, 56 days, 54 days and 53 days, respectively, followed by Adelaide, Sydney and Canberra. Hobart saw the shortest average time on market for houses at 28 days.

For units, the longest time on market was seen in Darwin, Melbourne and Brisbane at 95 days, 78 days and 73 days, respectively. The shortest time on market for units was observed in Hobart at 30 days.

Median vendor discounting for houses was highest in Darwin and Melbourne at -3.6 per cent and -3.2 per cent, respectively, and lowest in Sydney and Canberra at -2.2 per cent and -1.2 per cent, respectively.

Finally, median vendor discounting for units saw the highest rate in Perth at -3.6 per cent and the lowest rate in Canberra and Adelaide at -2.0 per cent and -1.9 per cent, respectively.

Auction clearance rates improve across capital city markets
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