Auction activity remains ‘below average’

Data from CoreLogic for the week ending 17 May showed that Sydney, one of Australia’s largest auction markets, returned a preliminary clearance rate above 70 per cent.

According to the property research group, this suggested the relaxation in social distancing measures specific to housing had an “immediate and positive impact” on home auctions.

There were 193 auctions scheduled in Sydney last week, returning a preliminary clearance rate of 73.4 per cent. In comparison, the week of 10 May saw 216 homes taken to auction with a clearance rate of 66.3 per cent.

However, the number of auctions in Sydney remain well below last year, when 276 homes were taken to auction with a clearance rate of 56.5 per cent.

The NSW government lifted the ban on on-site auctions and property inspections across the state effective from 9 May following a decline in new coronavirus cases in the state.

Other states followed suit, with Victoria, Western Australia, Queensland and South Australia reintroducing on-site auctions and property inspections.

The federal government had issued the bans in March as part of efforts to curb the spread of the coronavirus in Australia.

CoreLogic data showed that in Melbourne, 118 homes were scheduled to go under the hammer last week, and so far, 93 auctions have been reported, returning a preliminary success rate of 60.2 per cent.

The previous week saw a final clearance rate of 56.5 per cent across 163 auctions.

Across the capital cities, there were 400 capital city homes scheduled for auction, with preliminary results returning a 64.0 per cent clearance rate. The previous week saw 480 homes scheduled for auction, with a final clearance rate of 59.9 per cent.

Preliminary clearance rates jumped to a two-month high during the week of 10 May, while withdrawal rates decreased. This contributed to the improvement in clearance rates.

One year ago, there were 930 homes taken to auction, and a 55.2 per cent clearance rate.

“It is important to interpret clearance rates with caution given auction volumes remain substantially lower than usual,” the CoreLogic Property Market Indicator Summary stated.

Adelaide saw a substantial dip in the number of homes taken to auction compared with last year, with only 10 auctions last week compared with 83 homes in the corresponding period last year.

Adelaide returned a clearance rate of 71.4 per cent last week, compared with 50.7 per cent last year.

Only 28 homes were taken to auction in Brisbane last week, with a clearance rate of just 25.0 per cent, compared with 76 total auctions and a clearance rate of 40.0 per cent last year.

There were eight auctions in Perth last week, with a preliminary clearance rate of 16.7 per cent. This compares with 29 auctions last year, and a clearance rate of 21.7 per cent.

Canberra was the only capital city that saw an increase in total auctions compared with last year, with 41 homes taken to auction and a success rate of 67.9 per cent. Last year, there were only 31 total auctions, with a clearance rate of 51.7 per cent.

[Related: New housing sales fall to new low]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.