Melbourne boosts quarterly auction volumes

A delayed “flurry” of activity in Melbourne following the easing of restrictions across the city led to a significant increase in auction volumes over the December 2020 quarter.

CoreLogic’s Auction Market Review has found that there was a 44 per cent increase in auction volumes over the three months to December, with over 20,489 homes taken to auction across the combined capital cities.

This was up from 14,216 over the September quarter.

Meanwhile, the combined capital city clearance rate was recorded at 69.4 per cent over the December quarter, which according to CoreLogic has made it the best-performing quarter of 2020, followed by March 2020 at 62.5 per cent, 47.9 per cent in the second quarter, and 59.2 per cent in the third quarter.

CoreLogic’s head of research Australia, Eliza Owen, said that 65.2 per cent of the increase could be attributed to Melbourne, and the “resurgence” of auctions across the city.

“Vendor activity became pent up during stage 4 restrictions across the city, leading to a delayed flurry of activity,” she said.

“Stage 3 and 4 COVID-19 restrictions created subdued consumer sentiment, and led to limited transaction activity across the city over the September quarter, creating pent-up demand from vendors looking to sell toward the end of 2020.

“As restrictions eased, we saw new listings soar across Melbourne, with people looking to sell, and last year the seasonal drop-off in activity happened about a week later than we would typically expect, as agents tried to keep up with vendor demand.”

However, Ms Owen said that while the three months to December 2020 was the busiest quarter of 2020, it was considerably lower than the December 2019 quarter, when 26,923 homes were taken to auction across the combined capitals.

“Based on the momentum that was building in the market towards the end of 2020, along with strong selling conditions and record-low interest rates, we would expect auction results to continue on a strong footing into 2021 as volumes ramp up, providing there’s no major resurgence of COVID-19 in the community, which would serve to dampen the momentum building late last year,” Ms Owen said.

The CoreLogic review has further revealed that of the 20,411 auction results collected over the latest quarter, just 8.9 per cent reported a withdrawn result, compared with 18.7 per cent over the September quarter, and 31.0 per cent over the June quarter.

Of the sold results, 36.8 per cent were sold prior to auction, compared with 42.0 per cent over the September quarter, and 47.8 per cent over the June quarter, according to the property research group.

[Related: Melbourne lockdown amplifies financial stress]

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.