- Australian auction clearance rates have climbed above 50% for the first time since late September last year.
- A significant reduction in market activity compared to prior years and the possibility of more realistic price expectations from vendors likely explain the large improvement.
- Auction activity will pick up further in the week ahead although volumes still remain weak compared to last year.
For the first time since late September last year, more than 50% of Australian capital city homes taken to auction sold last week.
According to final figures released by CoreLogic, Australia’s combined capitals clearance rate rose to 51.1%, a substantial increase on the 42.4% level recorded in the prior week.
The final reading was revised down from the preliminary estimate of 54.1%, reflecting that most tardy results are for properties that failed to clear.
Reporting rates to CoreLogic stood at 84.4%, marginally below the level seen seven days earlier.
Of the 783 results received, 401 homes sold while 382 were unsuccessful.
The lift in clearance rates came despite a sizable lift in auctions across the country, increasing to 928 from 536 a week earlier.
However, total volumes were still well below the 1,470 level seen in the same corresponding week a year ago. Back then, the final auction clearance rate was also higher at 63.7%.
The reduction in volumes over the past year reflects weaker market conditions, one factor that has also led to some vendors preferring to sell via private treaty rather than at auction.
The lift in clearance rates is often seen at this time of the year, largely reflecting that there are less properties on offer compared to spring and autumn.
Significantly reduced volumes this year, along with the possibility of more realistic price expectations being set by vendors given ongoing price falls, likely contributed to the large lift seen this week.
The increase in clearance rates did not coincide with a lift in prices with values continuing to fall in most mainland capital cities, led by Sydney and Melbourne.
As seen in the table below, clearance rates improved last week in all capital city markets, ranging from 55.3% in Canberra to 37.1% in Brisbane.
Both Sydney and Melbourne recorded success rates in excess of 50%, a result that has rarely been seen outside of holiday periods since the middle of last year.
Providing a stern test of current market conditions, auction volumes will lift substantially again this week, mirroring the seasonal pattern often seen in the lead up to Autumn.
CoreLogic is currently tracking 1,359 auctions across the capitals, up from 928 last week. However, that total is still well below the 1,992 homes that went under the hammer in the same week last year.
Activity in Melbourne will nearly double with 607 properties going to market. In Sydney, volumes will also lift substantially to 501.
Across the smaller capitals, only Canberra and Perth will see an increase in activity compared to a week earlier.
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