Hammer falls on bumper auction season with more expected

More homes were auctioned in the final three months of last year than in any of the previous four quarters.

Sam Playfair with his wife Liz Franklyn and their 3-month-old son Ollie at their two-bedroom art-deco flat in Melbourne. Picture: Aaron Francis

More homes were auctioned in the final three months of last year than in any of the previous four quarters, with property researcher CoreLogic expecting strong clearance rates to continue when listings grow through 2020.

The property industry struggled through winter as sellers went into hibernation, which caused new listings to drop to their lowest levels ever.

But CoreLogic’s new Quarterly Auction Report shows that spring well and truly sprang through the final quarter of 2019, with 1000 more homes taken to auction than the year prior.

Not only did the number of homes climb, so did the number that sold. Clearance rates climbed to an average of 70.3 per cent across the combined capital cities, with the strongest results coming out of Sydney (74.9 per cent) and Melbourne (72.8 per cent). It was a stark contrast to the fourth quarter of 2018, when only 43.6 per cent of homes sold nationally under the hammer.

With confidence on the rise and sellers now motivated to list, the number of homes headed to auction is expected to rise through 2020. But CoreLogic’s head of residential research, Eliza Owen, said the increase would have little impact on clearance rates.

“Clearance rates should continue to rise or at least stabilise at a higher level, even if the volumes at auction rise,” Ms Owen

“This was observed in the December quarter. The clearance rates increased 40 basis points despite the number of auctions rising significantly. That’s because the volume of auctions and the clearance rate are both influenced by price changes — they aren’t dependent on each other.”

Sam Playfair and Liz Franklyn, both in their early 30s, have decided it is time to upgrade from their art deco apartment on the edge of Melbourne’s Albert Park Lake now that they have their four-month-old baby, Ollie.

Being the first sale in the building in just over three years, the couple hope to capitalise on the home’s uniqueness and the overall demand in the market.

“We think it is definitely a good time to go, based on our situation and ride the wave of 2019. Hopefully getting in early will work in our favour,” Mr Playfair said.

“There was a good precedent set late last year that we hope will carry through to the start of this year. We are fairly confident.”

McGrath St Kilda principal Michael Townsend said his firm was launching the campaign to coincide with the traditional post-Australia Day start to auction season and to capitalise on scarcity.

“We anticipate the first quarter will have low volumes before picking up throughout the year. It makes sense to go now,” Mr Townsend.

The north Melbourne suburb of Reservoir hosted 221 auctions, the highest number in any suburb last quarter.

Every home put to auction in Camperdown, Kingsford and Panania in Sydney and the south east Melbourne suburb of Balaclava sold under the hammer.

Outside of the capital cities, clearance rates increased across three of the five key regional markets over the December quarter.

Geelong returned the highest clearance rate (62.8 per cent), while more than half of all homes sold at auction in Wollongong (52.6 per cent) and the Hunter region (54.2 per cent).

The Gold Coast was the busiest regional area, with 634 homes taken to auction.