Auctions hot ahead of seasonal slowdown
Consistently strong auction clearance figures this year have encouraged a slew of sellers to try their luck under the hammer, creating a strong end to the autumn selling season.
Consistently strong auction clearance figures this year and signs of a price peak have encouraged a slew of sellers to try their luck under the hammer, creating a strong end to the autumn selling season.
Buyers around the country have purchased around four in five properties at auction most weeks through the first five months of 2021. It was no different this week, with an unseasonably high 2876 auctions held nationally, with a preliminary clearance rate of 80.4 per cent, according to CoreLogic.
The property researcher’s executive of research Tim Lawless said that despite signs the market fever is starting to calm — such as rising seller activity and emerging buyer affordability issues — some heat from the current upswing is likely to carry into the cooler months.
He said conditions are similar to those observed at the height of the market in 2015 and 2017.
“The market is still really strong even though it has cooled a little since late-March,” Mr Lawless said. “We are still seeing auction volumes and clearances well above average for this time of year.”
The winter months are traditionally slower for sales, with the number of homes listed and auctioned beginning to taper off following the Easter long weekend.
Volumes were high in the same week of 2018, with 2311 auctions held. But the market downturn of the time saw only 62.1 per cent sell.
A year later, despite the green shoots of recovery having begun to emerge in May 2019 as part of the post-federal election “ScoMo bounce”, only half (52.5 per cent) of the 1479 properties auctioned were successful.
A comparison to 2020 is unavailable as the market was impacted heavily by COVID-19. Just 612 properties were offered over the same week via virtual auction platforms.
Ray White’s Victorian chief auctioneer Matt Condon said buyers were beginning to be more savvy with their bids after many fell victim to FOMO — the fear of missing out — in recent months.
“On the ground, it was noticeable buyers were holding back … once properties were announced on the market, it was great to see competition and momentum well and truly continued past that point,” Mr Condon said.
Melbourne was home to the majority of auctions (1277) this week, followed by Sydney (1121), recording respective preliminary clearance rates of 83.5 per cent and 77.1 per cent. Perth reported 92.3 per cent of the 22 properties auctioned sold, the strongest result in the smaller capitals. One in 10 of the 120 homes auctioned in Canberra sold, while more than half of all homes sold in Adelaide (86.1 per cent from 201 properties), and Brisbane (64.9 per cent from 133 homes).
Preliminary figures are likely to be revised down through the week as results are finalised.
A large portion of the record high new home listings coming onto the market are being taken to auction to take advantage of competition among the high number of bidders. And with five weekends in May, Mr Condon is bracing for a busy month.
CoreLogic will release its monthly house price data on Monday, which is on track to show significant rises.
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