Auction clearance rates ‘soften’, though market remains hot

Auction clearance rates have remained strong this weekend, as the market cools off slightly after a month of record breaking sales.

2170 homes went under teh hammer at the weekend.

Auction clearance rates remained strong this weekend, with more than 80 per cent of homes sold in capital cities across the country, as the market cools off slightly after a month of record-breaking sales.

Property researcher CoreLogic reported that 82.8 per cent out of 814 homes in Sydney and 77.2 per cent out of 1035 homes in Melbourne sold at auction, with 2170 homes going under the hammer nationally.

CoreLogic head of Australian research Eliza Owen said the market remained “hot” despite this weekend’s results, which reflected a slight drop compared to previous weeks, after clearances edged closer to 90 per cent in Sydney last month.

“These numbers do show a slight softening from previous weeks,” she said.

“For the past four weeks, the preliminary clearance rates have been at 82 per cent across the capital cities; now it’s at 79.9 per cent.”

“Since the start of the year, the clearance rate across the capital cities has been above 79 per cent, which is extremely strong and considered to be a hot market.”

Clearance rates were also strong in other capital cities, with 90 per cent of homes in Canberra sold, 82.6 per cent in Adelaide and 80.9 per cent in Brisbane.

Ms Owen said the market was driven by high demand for fewer properties and its true test would come when the traditionally busy spring auction season arrived.

“In the spring sale, we might see more supply come on to the market,” she said. “The March quarter saw sales volumes rise 20 per cent from last year but listings are 36 per cent below their five-year average. Demand has been rising but there is limited stock in the market.

“Spring time will be an interesting time in the market with more people listing their properties for sale.”

Ray White Group managing director Dan White said it was too early to call this week’s numbers a trend, and believed prices could still be pushed higher in the coming weeks. “It’s another big one and there are still some bigger ones to come in the weeks ahead,” he said.

“It’s too early to call it a trend, it’s a slight shift.

“It would be interesting to see if it continues over the next few weekends.”

He said the slightly lower clearance rate was more likely the result of buyers balancing their expectations.

“The clearance rate is a little softer across the board as vendor expectations have levelled out, even though the number of buyers is still strong,” he said.