The auction market continues to lose momentum, with the lack of registered bidders, rising withdrawals, and weakening confidence raising fresh concerns ahead of the spring selling season.
Falling consumer confidence has weighed on the auction market over the last couple of weeks, with declining volumes, weaker clearance rates, and auctions increasingly struggling to attract registered buyers.
Real Estate Gym founder Tom Panos said that over the weekend ending 27 July in Sydney, he had hosted several auctions where not a single registered buyer showed up.
“Not one buyer registered. The first one, the vendor showed up and the agent. The second one, the vendor didn’t even show up,” Panos said on social media.
“You know the market’s not quite right when the only person to show up to the auction is the agent. Not even the vendor.”
He said that despite the poor number of active buyers, there was an advantage to being willing to operate in a slower market.
“Before anyone panics, markets like this feel lonely. They test agents, they test sellers, they test buyers. So here’s what I’ve learnt after decades in real estate.”
“The quietest markets create the biggest opportunities, because when everyone is waiting for the crowds to come back, there are a few smarties out there; opportunistic buyers are getting on with business.”
Recent Cotality data showed that while national auction volume numbers were on the rise, around one-in-five auctions were still being withdrawn, as market confidence waned.
While volume climbed over the past two weeks, the data showed it remained significantly below the level set 12 months ago, with 1,421 auctions taking place over the week and clearance rates around 52 per cent.
Additionally, the report showed that withdrawal figures had fallen over the past week, but remained higher than the same week period 12 months ago.
Of the 433 homes listed at auction in Sydney over the past week, almost two-thirds, or 63.4 per cent, sold before the property even went under the hammer.
Melbourne recorded 707 auctions over the past week, with a clearance rate of 54.6 per cent, while around one-third of Brisbane’s 138 auctions cleared.
Adelaide was the only capital to eclipse its figure from the previous year, hosting 99 total auctions.
Cotality told REB that the decline in activity was beyond the typical seasonal decline, with the clearance rate being the most concerning figure for the industry.
“While the volume of auctions does show a clear seasonality, the actual clearance rate shows very little seasonality,” a Cotality spokesperson said.
“The number of auctions has been holding consistently lower than a year ago, in line with the flow of new listings coming to market tracking at lower than average levels as selling conditions become more challenging.”
Looking beyond the current climate, Cotality said that the real test for the housing market would be in the Spring, when activity was typically at its highest level.
“We aren’t expecting buyer demand to improve until confidence returns to the market, which in turn is likely to be dependent on inflation being tamed and an expectation that interest rates will reduce.”
“With demand expected to remain in the doldrums, it's likely clearance rates will hold at these below-average levels for some time.”
Want to see more stories from trusted news sources?Make Real Estate Business a preferred news source on Google.
