Melbourne leads auctions slowdown as houses pulled from market

Melbourne vendors are pulling houses off the market while lockdown rules are in force, but some other states are seeing signs of stabilisation.

More than 40 per cent of the auctions scheduled to take place in Melbourne over the weekend were withdrawn. Picture: NCA Newswire

Melbourne is bearing the brunt of a slowdown in auctions, with many vendors pulling their properties off the market while lockdown rules are in force and the clearance rates in the state falling.

But other residential property markets, including Sydney, are seeing signs of stabilisation, partly driven by low interest rates and discounting in some segments.

Research house CoreLogic noted the national fall in volumes, as there were 1,167 homes scheduled for auction across all capital cities this week, down from 1,269 over the previous week.

Of the 938 results that have been reported so far, 59.2 per cent were successful, up from last week’s final clearance rate of 56.2 per cent, albeit lower than this time last year when the rate was at 65.4 per cent.

There were 499 auctions scheduled in Melbourne this week, similar to the previous week when 506 homes were taken to auction.

But the vendor nervousness showed up due to the hefty impact of the lockdown.

Preliminary results show that of the 413 results collected so far, just 47.5 per cent were successful, while 43.6 per cent were reported as withdrawn, against only 15.1 per cent of Sydney auctions.

CoreLogic said the withdrawal numbers are not overly surprising given that Melbourne is currently in lockdown.

The previous week saw a final clearance rate of 51.2 per cent, while this time last year, a more healthy 67.5 per cent of Melbourne auctions reported a successful result.

“With restrictions in place across Melbourne for another four weeks, we are likely to see more auctions being withdrawn from the market than normal, which will drag the clearance rate lower,” CoreLogic said.

In Sydney, 512 homes were scheduled for auction this week, slightly down from 566 over the previous week, although higher than a year ago in the wake of the federal election.

Of the 411 auction results collected so far, 68.9 per cent were successful, although this will drop as the remaining results are collected.

In comparison, the previous week reported a final clearance rate of 61.8 per cent, well below the clearance rate of 72.8 per cent this time last year.

Taking out “withdrawn auctions” from the clearance rate calculation, and focusing purely on those auctions that went ahead showed a much higher 84 per cent “adjusted” preliminary clearance rate, with a slim majority of these properties selling prior to the auction rather than under the hammer or afterwards.

In the smaller capitals, Canberra recorded a preliminary clearance rate of 90.6 per cent, followed by Adelaide at 64.3 per cent. Brisbane reported a preliminary clearance rate of 59.1 cent, while Perth had a 40 per cent success rate although volumes were low.