Clearance rates down as number of auctions rise across Australia

Houses by the sea.

Eased restrictions and growing chatter about an interest rate hike have encouraged more vendors to put their homes on the market, but auctions are no longer returning the strong results they were throughout the year.  

According to property research firm Corelogic, 3,562 capital city homes went under the hammer in the week ending 14 November — up 8.2 per cent from the previous week when 3,292 went to auction.

But the increase in supply has caused clearance rates to dip. Last week, CoreLogic recorded a preliminary clearance rate of 75.5 per cent across capital city markets — the fifth consecutive week that figure has fallen. 

In Sydney, 1,290 auctions took place, with 75.1 per cent of the 1,086 results recorded so far resulting in a sale. At the same time, 13.0 per cent of properties were withdrawn from auction, marking the highest withdrawal rate since mid-August.

In Melbourne, the number of homes taken to auction was also up (1,556 compared to 1,398 in the previous week), but unlike other capital cities, the preliminary clearance rate rose by 2.1 per cent.

So far, 74.1 per cent of the 1,324 auctioned homes have returned a successful result. Last week, Melbourne recorded a preliminary clearance rate of 72 per cent, which was later revised down to 67.7 per cent. 

Capital city properties listed.
Data from CoreLogic.

Meanwhile, preliminary clearance rates in Canberra and Adelaide have dipped below 80 per cent for the first time in more than two months. Of the auctions that have been recorded so far, 79.9 per cent in Canberra and 77.8 per cent in Adelaide were successful.

CoreLogic researcher Kaytlin Ezzy said the increase in auction activity is likely to continue as a growing number of vendors regain confidence in current market conditions.

“With lockdown restrictions having eased in Sydney, Melbourne and Canberra, auction volumes have increased by 79.4 per cent since the first week of October,” she said.

“With each week outperforming the last, it's unlikely that auction volumes have reached their peak. Due to a combination of pent-up supply and seasonal factors, auction volumes are set to rise further through the second half of November.”

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