Despite auction activity rebounding this week, rising rates and economic uncertainty continue to dampen buyer confidence and the property market.
While clearance rates have been hanging below the 60 per cent mark for two weeks in a row, with the Easter weekend seeing the lowest early clearance rate in four years, this week the market has been expecting a rebound.
New data has shown auction activity is set to rise this week, up 39.5 per cent from the week prior, ahead of another decline during the Anzac Day weekend.
Cotality’s latest auction market preview found that auction activity is set to rise this week, with 2,618 auctions scheduled, up from 1,877 the previous week.
Saturday is set to account for the bulk of activity, with 2,181 of the total capital city auctions taking place on the day.
Despite the market slowing, this week's expected auctions are higher than last year's results, when only 644 capital city homes went under the hammer.
Melbourne is set to have the most auction activity, with 1,213 homes scheduled to go under the hammer, up from 875 auctions last week.
Contrastingly, during this time last year, just 148 auctions were held across the city.
Cotality head of research Gerard Burg said that, across the country, Melbourne has traditionally held the most auctions since data recording began in mid-2008.
In Sydney, 968 homes are currently scheduled for auction this week, up from 684 last week, while 359 auctions were held across the city at the same time last year.
“This is actually the most common situation. Auction activity is heavily skewed towards Melbourne and Sydney, where auctions are a more prevalent selling method than in other capitals,” he said.
Despite not being as popular, Brisbane is set to be the busiest auction market among the smaller capitals, with 211 homes set to go under the hammer, up from 117 last week.
Meanwhile, the data showed that Canberra has 112 auctions scheduled, up from 62 the previous week, while Adelaide has 104 homes to go under the hammer, down from 125 last week.
In Perth, 10 auctions are scheduled this week, down from 13, while there are no auctions scheduled in Tasmania.
Next week, Cotality projects auction activity to sharply fall, with 757 homes scheduled for auction across the combined capitals, marking a 71 per cent decline from this week’s number.
It said that next week’s projected reduced volume can be attributed to the Anzac Day weekend, with NSW, Western Australia, and ACT observing an additional public holiday on Monday, 27 April.
According to Burg, the auction data has been reflecting the current sentiment in Melbourne and Sydney that, despite a surge in supply, buyer sentiment has started to weaken.
“This reflects the impact of two interest rate rises already this year (along with the prospect of more to come) and the broader uncertainty from rising energy prices and cost of living.”
This year, the auction market is expected to be down over the next couple of months as buyers' uncertainty ramps up due to cost-of-living pressures, interest rate rises, and global events.
“Uncertainty has a tendency to make people sit back and wait, and I think we're seeing that in the clearance rates, which have dropped substantially from their levels in early February,” he concluded.
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