The housing market is facing its next test

The housing market is about to face its latest test as auction volumes start to rise. Photo: Heath Holden/ Getty Images.

It’s going to be a busy weekend for property auctions across Australia, thanks in part to the AFL and NRL finals, along with a series of public holidays, falling in the following week.

According to CoreLogic, 2,305 auctions will be held, up from the 2,149 figure seen last week.

Melbourne, at 1,046, will be the busiest auction market, followed by Sydney, Brisbane and Adelaide with 864, 127 and 118 auctions respectively.

“Reservoir, in Melbourne, is by far the busiest individual suburb for auctions this week, with 28 scheduled. The next busiest suburb is also in Melbourne, with Richmond set to host 19 auctions this week,” notes CoreLogic.

Though still below the levels of a year earlier, many will see this at the first big test of the spring selling season given the sharp lift in the number of properties being taken to auction.

Last week, a national capital city auction clearance rate of 76.2% was achieved, marginally below the yearly high of 77.1% seen in the first week of September.

By capital city, Sydney, at 81.6%, recorded the highest clearance rate across the country, narrowly trailed by Melbourne, Adelaide and Canberra.

“The two major auction markets remained the strongest performing, with clearance rates of 81.6 per cent and 77.8 per cent in Sydney and Melbourne respectively. In Sydney, there were multiple sub-regions where the weekly clearance rate surpassed the 90 per cent mark last week, while in Melbourne four out of the nine sub-regions recorded a clearance rate of at least 80 per cent,” said CoreLogic.

“Adelaide, at 74.7 per cent and Canberra, at 72.0 per cent, also recorded a strong result last week, a good indicator of the respective auction markets, given auction activity also increased in both cities.”

This table from CoreLogic shows the performance of individual markets last week.

And this chart, also from CoreLogic, shows the evolution in combined capital city auction clearance rates going back six years. Though lower than the levels seen early last year, it remains elevate compared to previous norms.

Lower-than-normal auction numbers, lower interest rates and signs that property investors may be returning to the market go some way to explaining the recent lift in clearance rates across the country.

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