Preliminary capital city clearance rate holds above 70%

By Kaytlin Ezzy, Economist, CoreLogic

The end of school holidays across Victoria is likely to be a contributing factor to the 6.3% increase in auctions this week, with 1,518 homes auctioned across the combined capitals. Sydney and Melbourne drove the lift in auction numbers as volumes across the smaller capitals remained relatively flat. Although up from the previous week, this week’s capital city auction activity is -10.1% below the numbers recorded this time last year (1,689).

With 1,132 results collected for far, the combined capital’s preliminary clearance rate trended lower to 72.3%, down 2.2 percentage points from last week’s preliminary clearance rate of 74.5%, which revised to 68.4% at final numbers. The time last year, 53.0% of auctions were successful. 

After easing over the school holidays, auction activity across Melbourne rebounded 11.4% this week, with 636 auctions hosted across the city. The last week saw 571 homes auctioned, while this time last year, 675 homes went under the hammer. Melbourne was the only capital to record a rise in the preliminary clearance rate this week, with 74.3% of the 502 results collected to date returning a positive result. This week’s preliminary clearance rate was 1.5 percentage points above last week’s preliminary rate (72.8% revised to 68.0%) and 22.1 percentage points higher than this time last year (52.2%), when selling conditions were markedly weaker. 

In Sydney, 600 homes went under the hammer this week, up from 567 the week prior but -6.0% below the 638 auctioned this time last year. Of the 434 results collected so far, 74.9% returned a successful result, down 70 basis points from the previous week. The dip in the preliminary clearance rate seems to be driven by a lack of vendor confidence, with the withdrawal rate rising to 12.7% while the portion of properties passed in at auction fell to 12.4%. Despite the fall, Sydney recorded the highest preliminary clearance rate across the capitals. Last week a preliminary clearance rate of 75.6% (revised down to 68.8%) was recorded, while this time last year 54.0% of auctions held recorded a successful result.

Across the smaller capitals, both Adelaide and Brisbane saw 102 homes go under the hammer this week. Both markets also recorded their lowest preliminary clearance rate in four weeks, with 71.4% of Adelaide auctions and 59.8% of Brisbane auctions reporting a successful result. Canberra saw a decline in both the preliminary clearance rate and auction numbers (down -16.3 percentage points and -20.8 percentage points respectively), with 60.0% of the 57 homes auctioned across the city this week recording a successful result. In Perth, 20 homes went under the hammer this week; five have been successful so far. The one auction held in Tasmania this week was successful.

The recent unseasonal upwards trend in auction activity continues this week with approximately 1,850 auctions currently scheduled across the capitals. We could see the preliminary clearance rate dip below 70% for the first time in 12 weeks if the increase in auction numbers is not met with additional buyer demand. 

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