Auction markets: Melbourne wanes while Sydney gains

Auction activity in Melbourne has slumped to its lowest volumes since May, while Sydney has recorded its busiest auction week since April.

Auctioneer Fabian Sanelli, who has converted both his garage and a study into auction studios during Melbourne's lockdowns. Picture: Jay Town

Auction activity in Melbourne has slumped to its lowest volumes since May, suggesting vendors are becoming increasingly reluctant to test the market through the coronavirus lockdown period.

Preliminary results across the Victorian capital show just under half of the 167 properties taken to auction last week were successful (49.6 per cent), while the other half were reportedly withdrawn. This was down slightly from the previous week’s results when 50.3 per cent of 222 homes were sold at auction. Of the sold results collected, 88.3 per cent sold prior to the scheduled auction date.

Nerida Conisbee, chief economist for REA Group and auction commentator, said the high withdrawal rate coupled with an already low number of scheduled auctions and a high proportion of properties selling prior to auction suggested vendors had become increasingly reluctant to test the market during the lockdown. 

“We’re expecting very subdued sales activity in Melbourne until at least mid-September when things will hopefully start opening up again,” Ms Conisbee said.

“The whole economy in Melbourne is on freeze … It’s incredibly hard to sell because homes can’t be inspected properly and people need to remain within 5km of their current residence.”

Ms Conisbee said the outlook was positive though, with data suggesting search activity on realestate.com.au was significantly higher than this time last year.

“What will likely happen in Melbourne is what happened in New York and New Zealand where they had similar strict lockdowns but straight after they had a big surge in activity,” she said.

Sydney’s auction market recorded its busiest week for auctions since April. There were 730 homes taken to auction last week, returning a preliminary auction clearance rate of 74 per cent.

This was an improvement on the previous week’s preliminary figure of 71.9 per cent, with the number of auctions across the city trending higher week on week.

One year ago, a lower 590 Sydney homes were taken to auction returning a higher final success rate of 74.5 per cent.

Across the small markets, Adelaide recorded the highest preliminary clearance rate of 83.9 per cent from 59 auctions, Canberra followed with 75.9 per cent of 79 homes selling at auction over the week. In Brisbane, just 44.6 per cent of 113 properties sold successfully at auction last week but Ms Conisbee said southeast Queensland was continuing to record strong auction results.