Auctions look past snap Victoria lockdown, Sydney market strong

Melbourne recorded a resilient auction result even as 20 per cent of homes were withdrawn, while Sydney’s market remained strong.

Locked-down Melbourne recorded a preliminary clearance rate of 72.8 per cent on 1264 homes taken to auction, down from last week’s 77.6 per cent. NSW. Picture: NCA NewsWire / Dylan Coker

Victoria’s circuit-breaker lockdown dampened auction results over the weekend as one-in-five Melbourne vendors got cold feet and withdrew their properties, but buyers were undeterred, with close to half of the homes scheduled to go under the hammer selling prior to auction.

Sydney, meanwhile, has powered ahead as the strongest market across the capital cities and is on track to record month-on-month gains of 3 per cent for May.

Locked-down Melbourne recorded a preliminary clearance rate of 72.8 per cent on 1264 homes taken to auction last week, down from the prior week’s 77.6 per cent.

The volume of auctions was hit by the seven-day lockdown, with 1451 Melbourne homes expected to go under the hammer before the restrictions were announced, according to CoreLogic.

Based on the data collected so far, 20.6 per cent of Melbourne’s auctions were reported as withdrawn, while 48.4 per cent of successful auctions were sold prior to auction, CoreLogic head of research Tim Lawless said.

“It’s a very resilient result that we‘re still seeing clearance rates holding above 70 per cent. And that’s despite a fairly large number of auctions being withdrawn, which actually count as an unsuccessful result.”

The number of homes sold prior to auction in Melbourne, at close to 50 per cent, was also significant, he said.

“In a typical week, you‘d only see generally around 10 per cent or so would sell prior to auction. So we’ve seen a real surge in vendors willing to negotiate prior to the auction event itself. No doubt some vendors took advantage of the strong conditions and accepted offers prior to auction,” Mr Lawless said.

This week was set to be the second biggest auction week of the year so far, but national volumes ended up falling slightly due to the lower Melbourne numbers.

There were 2,930 homes taken to auction over the week, making it the third highest auction week across the combined capitals this year.

The lockdown weighed on the national results, with 75.7 per cent of the 2,460 results collected so far recorded as successfully selling at auction.

This is down from last week’s preliminary clearance rate of 78.2 per cent across 2,845 auctions.

The Victorian restrictions will likely affect auction numbers more severely if it goes on longer than the planned seven days, he warned, with this week’s numbers likely holding up because buyers had been able to view the properties before the state was plunged into lockdown.

Sydney, meanwhile, has shown no sign of slowing down, recording an 81 per cent preliminary clearance rate on 1177 homes taken to auction.

CoreLogic is due to report its monthly figures on Tuesday, and Sydney’s numbers will be strong, according to Mr Lawless.

“Sydney is well and truly leading the pack still for the fastest growing market in terms of the pace of value growth.

“I think we’ll be reporting a number up around the high twos to early 3 per cent month on month range for value growth in Sydney, which will be the highest capital city,” he said.

Canberra has also been “an absolute standout” for clearance rates, while not showing the same level of value growth as Sydney, Mr Lawless added.

Across the other capital cities, Canberra recorded a preliminary auction clearance rate of 84.7 per cent, followed by Brisbane where preliminary results show 71.9 per cent of auctions were successful.

Adelaide recorded a preliminary auction clearance rate of 69.3 per cent, while in Perth, 34.8 per cent of reported auctions were successful.