Despite softer clearance rates and cautious buyers, agents who align vendor expectations with market reality are still securing strong auction results in a price-sensitive winter market.
While the early clearance rate has fallen below 55 per cent for the third week in a row, there are still opportunities for agents to achieve solid results through auctions.
According to Cotality’s latest Property Market Indicator Summary, 54 per cent of capital city auctions recorded a positive outcome, based on early results.
It marked the third week in a row in which the preliminary clearance rate held below 55 per cent, with nine of the past 11 weeks seeing it track under 60 per cent.
McGrath chief auctioneer, Scott Kennedy-Green, said the property market was currently in uncharted waters, particularly following three rate rises, and the capital gains tax and negative gearing reforms.
He said, despite the recent results, some areas where agents have managed to bring vendors in line with buyers’ expectations were still seeing “standout results”.
“That’s a bit of an exception to the broad view, but ultimately we’re sitting between a 42 to 46 per cent clearance, and it seems to be more of a buyer’s market than a seller’s market,” he told REB.
“But if the motivation is right, there are buyers there wanting to transact.”
Over the weekend, the combined capitals saw 2,124 capital city homes go under the hammer, an 80.8 per cent bounce-back from the King’s Birthday long weekend.
Sydney saw 797 homes go under the hammer last week, a 64.3 per cent rise on the previous week but 3.9 per cent lower than the same time a year ago.
The preliminary clearance was 52.8 per cent, only down slightly from 52.9 per cent the week prior, marking the city’s third-lowest preliminary clearance rate recorded so far this year.
Melbourne saw 980 auctions held last week, a 131 per cent jump from the previous week, with the preliminary clearance rate rising to 57.6 per cent from 52.3 per cent the week prior.
In Brisbane, 144 auctions were held last week, a 6.7 per cent rise on the previous week and 13.4 per cent above the same time a year ago.
The city achieved a 42.0 per cent preliminary clearance rate, an improvement on the prior week’s 31.9 per cent result.
Adelaide held 110 auctions last week, a 39.2 per cent increase on the previous week, while 56.6 per cent of auctions recorded a successful result, down from 64.2 per cent the week prior.
In the ACT, there were 79 auctions held last week, up 119 per cent on the previous week, with 45.6 per cent of auctions returning a successful result, down from 50.0 per cent the week prior.
It marked the ninth straight week in which the ACT’s preliminary clearance rate remained below 55 per cent.
Perth hosted 13 auctions last week, one fewer than the previous week, and just one auction in Tasmania was successful.
Kennedy-Green said that the market was also entering a “lower stock level time of year,” with most buyers becoming more price-sensitive in many areas.
“Certainly, the background noise of the economic environment is playing into the hands of their purchasing power.”
He said that the current market posed challenges not only for vendors but for agents as well, and that it was more important than ever to help buyers see value in a home.
“At this point in time, there’s no pressure on the buyers. There are buyers, there are buyers in the marketplace today, but they are under no pressure to transact at speed.”
He said auctions were still the best-selling method as opposed to private treaties, given the difference he was seeing in the average days on market.
He said that, in the current market, it was easier to gain buyers’ interest when there was a time limit, as opposed to simply “putting a board up and hoping for the best”.
“Draw a line in the sand and have an end date so that you can work with buyers in the market at the moment wanting to transact.”
However, he said seasoned agents were those who knew how to navigate a range of markets.
“Whether that’s the Global Financial Crisis (GFC) or whether that’s COVID-19 or whether that’s any downturn in market conditions, the seasoned agents are better equipped to advise their vendors to bring their property to market.”
This week, Cotality is expecting around 1,950 capital city homes to go to auction, reducing to approximately 1,780 the following week.
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