Australia’s property market is about to receive its next big test with auction volumes set to hit levels not seen in several years this week.
According to CoreLogic, a whopping 3,451 properties are currently set to go under the hammer, up significantly from 2,519 in the previous week.
And, if previous trends are maintained, that figure could be even larger, leaving activity at the highest level since late 2015.
“The last time volumes reached a similar level was the pre-Easter week ending the 9 April this year when final figures saw 3,517 auctions held across the capitals,” CoreLogic says.
“While these counts are preliminary, as the week progresses and results are collected, the number of homes taken to auction tends to revise up, which means that it’s likely this week will not only supersede April figures, but also surpass the peak in volumes recorded over the week ending 20 March, 2016.”
It’s going to be a big weekend, especially in Melbourne where auctions volumes could hit the highest level on record.
“Melbourne is set to see the most notable increase in activity with volumes expected to rise by 48% on last week’s figures. 1,846 Melbourne homes scheduled to go to auction, increasing from 1,251 last week,” the group says.
“The highest volume of auctions on record for Melbourne was recorded over the week ending 29 November, 2015 at 1,876, so this week may very well overtake that record.”
Tim Lawless, Head of Research at CoreLogic, says the lift in activity likely reflects seasonal patterns along with vendors bringing forward auction dates ahead of the Melbourne Cup next week.
“Partly, it’s seasonal. Auction markets tend to gather pace through the Spring season, historically culminating in peak level of activity in late November or early December,” he says.
“It’s also the week before Melbourne Cup, so there is likely to be some pull forward of demand due to the spring racing carnival festivities.”
While not to the same degree as Melbourne, auction volumes in Sydney will also increase significantly, rising by 39% to 1,144, the highest level seen this year.
Outside of Australia’s largest and most expensive housing markets, auction volumes look set to decline week-on-week in all other capitals aside from Canberra.
The surge in properties going under the hammer will provide a stern litmus test of buyer demand in Australia’s southeastern capitals, particularly at a time when price growth and clearance rates are easing.
According to CoreLogic, a national clearance rate of 64.7% was recorded last week, down from 67.1% a week earlier. That was also well below the 78.1% level reported in the same corresponding week in 2016.
By major capital, Melbourne’s final clearance rate fell to 70.3% from 73.2%. Sydney saw 61.3% of properties clear, down from 63.3% reported previously.
Across the smaller auction markets, clearance rates improved in Brisbane and Tasmania, while Adelaide, Canberra and Perth all recorded lower clearance rates, CoreLogic said.