Melbourne records strong auction success rate

There were 1,160 homes taken to auction across the combined capital cities last week (ending 9 August), similar to the previous week when 1,154 homes were taken to auction.

The combined capital city preliminary auction clearance rate was recorded at 65.9 per cent across 882 auction results so far, slightly higher than last week’s preliminary result of 65.3 per cent, which was later revised down to 58.7 per cent.

This time last year, the final clearance rate stood at 67.8 per cent.

The number of auctions held across Melbourne has reduced significantly through the second lockdown period imposed to curtail the second wave of coronavirus cases, with 298 homes scheduled for auction last week. This was down from 357 over the previous week and 500 this time last year.

Of the 244 auction results collected so far, 73.0 per cent were successful, although this will likely revise lower as the remaining auction results are collected.

Withdrawal rates have reduced considerably compared to the previous lockdown period in April and early May. The preliminary collection has indicated that only 18 per cent of Melbourne auctions were withdrawn from the market last week, compared with a peak of 65 per cent through the second week of April.

In the previous week, the final clearance rate was 55.1 per cent across the city, while this time last year, 72.3 per cent of Melbourne auctions were successful.

In Sydney, there were 642 auctions last week, up from 566 over the week prior, and 367 this time last year. Of the 483 auction results collected so far, 65.8 per cent have returned a successful result.

Last week, Sydney’s final clearance rate was 60.7 per cent, while one year ago, the clearance rate was 76.2 per cent.

Across the capital cities, Canberra recorded the highest preliminary clearance rate of 73.2 per cent across a low volume of 53 auctions, while Adelaide recorded a clearance rate of 71.4 per cent across 45 auctions.

There were 105 auctions in Brisbane with a preliminary clearance rate of 46.8 per cent, while Perth held only 17 auctions and recorded a 22.2 per cent success rate.

The number of new properties listed for sale in Melbourne have dropped by 23.8 per cent over the past 12 months to 4,458, and has dropped by 36.8 per cent in Darwin to 98.

Overall, the combined capital cities saw a 0.8 per cent decline in new listings over the past 12 months to 19,387 homes.

Mortgages activity

Demand for housing finance increased in Victoria, despite parts of the state being in lockdown, with CoreLogic data showing that the index value rose by 1.7 per cent month-on-month to 118.9.

South Australia was the only other state to post a gain, also rising by 1.7 per cent to 100.

Nationally, home loan activity fell by 0.7 per cent during this period to 112.7 per cent. 

Tasmania experienced the largest slump, with the index value falling by 5.2 per cent to 72.0, while NSW fell by 1.4 per cent to 149, and Western Australia fell by 1.6 per cent to 91. Queensland slumped by 0.7 per cent to 106.7. 

Recent data from the Australian Bureau of Statistics revealed that the value of housing finance approvals (seasonally adjusted) jumped by 6.2 per cent in June to $17.4 billion.

This followed an 11.6 per cent decline in May, and a 4.8 per cent drop in April.

However, Maree Kilroy, economist at BIS Oxford Economics, said the six-week lockdown imposed in Melbourne would soon dampen this recovery and stifle demand for housing finance. 

[Related: Melbourne businesses forced to close, banks to remain open]

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.