Sydney lockdown bites into auction market

CoreLogic’s auctions data for the week ending 11 July has revealed that there were 661 properties taken to auction in Sydney, down 17.1 from the initial predicted count as the city has continued to remain in lockdown amid a surge in coronavirus cases.

Sydney’s preliminary clearance rate was 76.5 per cent, with 19 per cent of properties withdrawn from auction.

Of the 434 sold results, 70.7 per cent were sold prior to the scheduled auction date.

“Both the withdrawal rate and proportion of auctions ‘sold prior’ were well above average across Sydney as vendors pivot their selling strategies amid the extended lockdown,” CoreLogic said in its auctions report.

Recent research by CoreLogic found that properties sold prior to auction spiked in Sydney and Melbourne during lockdown (including the shorter circuit-breaker lockdowns) compared with the last five years.

For example, in Sydney, properties sold prior to auction rose from the series pre-COVID average of 0.8 per cent to 3.1 per cent during the current lockdown, and 1.9 per cent during the 2020 stage 2 lockdowns.

There were 756 auctions held in Sydney over the previous week, with a final clearance of 70.5 per cent.

There were 2,121 capital city homes taken to auction over the week ending 11 July, with a preliminary clearance rate of 76.4 per cent, marking an improvement in clearance rates as volumes remained relatively steady week-on-week, according to CoreLogic.

The preliminary clearance rate over the previous week across the combined capital cities was a lower 73.6 per cent across 2,168 auctions, revising down to 72.1 per cent by final collection.

In Melbourne, there were 1,077 homes taken to auction last week, returning a preliminary clearance rate of 75.3 per cent.

Last week, there were 1,073 auctions held in Melbourne with a final clearance rate of 73.1 per cent, while last year, there were 506 auctions with a success rate of 51.2 per cent.

Across the smaller markets, Canberra was the top performer once again, with a preliminary clearance rate of 90 per cent across 84 auctions, followed by a preliminary clearance rate of 84.9 per cent in Adelaide across 112 auctions.

Brisbane recorded a preliminary clearance rate of 75.8 per cent across 162 auctions, while in Perth there were 20 auctions, with a preliminary clearance rate of 36.4 per cent.

Home values have continued to surge, with the CoreLogic Daily Home Value Index revealing a year-to-date rise of 12.8 per cent in home values across the combined five capital cities (excluding Hobart and Darwin), a 13.2 per cent rise over the last 12 months.

The index recorded a monthly rise of 1.7 per cent and a weekly rise of 0.4 per cent in home values.

The number of new properties listed for sale over the last 12 months rose by 26 per cent, but total listings over the past 12 months declined by 14 per cent, driven by the impact of the COVID-19-related restrictions imposed in 2020.

National housing finance activity declined by 12.8 per cent month-on-month, driven by a 19.2 per cent slump in Tasmania and an 18.5 per cent drop in Victoria.

Mortgage market activity also weakened in South Australia (down 13.8 per cent), NSW (down 13 per cent), and Queensland (down 11.2 per cent), but rose slightly in Western Australia (up 1.9 per cent).

[Related: Sydney auction markets strong despite lockdown]

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.