Strong clearance rates recorded in Sydney and Melbourne: RP Data's national weekend auction wrap

Strong clearance rates recorded in Sydney and Melbourne: RP Data's national weekend auction wrap
Strong clearance rates recorded in Sydney and Melbourne: RP Data's national weekend auction wrap

Over the week, auction volumes remained relatively steady, with 2,431 capital city properties taken to auction, increasing only slightly from 2,293 the previous week.

Meanwhile, the weighted auction clearance rate across the combined capital cities improved slightly over the week, up from 70.8% the week prior to 71.2% last week. Unlike the previous week, the performance across Melbourne and Sydney was more aligned last week, with both cities recording a strong clearance rate. At the same time last year, auction volumes were at elevated levels as it was the week prior to the Easter long weekend.

Traditionally, the number of auctions that take place over this week each year increases by around 25% when compared to the week prior, last year however, volumes increased by over 40% leading up to the Easter weekend. Despite the high volume of auctions held the week before Easter last year (2,649), the auction clearance rate was recorded at 64.1%, which is much lower than we are currently seeing.

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There were 963 residential Sydney properties taken to auction over the week and the preliminary auction clearance rate was recorded at 77.9%, compared to a 79.8% clearance rate across 868 auctions over the previous week.

When we look at the Sydney auction market at the same time last year, auction volumes were lower (912) and a lower proportion of homes were selling successfully under auction conditions (68.6%). These results highlight just how strong current conditions are across the city. In line with the strong auction performance, Sydney home values over the past year have increased by 14.9%, reinstating the strong performance of the Sydney housing market.

20140323 Sydney

Across Melbourne, a preliminary clearance rate of 71.7% was recorded last week from 895 auction results compared to 67.0% recorded both last weekend and this time last year.

At the same time last year, there were slightly more auctions held across Melbourne (1,294) compared to the 1,149 held this week, and a marginally lower clearance rate. Currently, Melbourne home values are 12.2% higher than they were at the same time last year and with one week to go this month, early indications show Melbourne home values are on track to record solid growth through March despite the increasing levels of homes on offer for sale.

20140323 Melbourne

Because Brisbane is a much smaller auction market than both Melbourne and Sydney, auction clearance rates across the city have the tendency to vary substantially from week to week. Last week, Brisbane’s preliminary auction clearance rate was recorded at 37.3%, down from 54.5% the week prior. Last week, 127 residential properties were taken to auction across the city, compared to 138 over the previous week.

Brisbane auction volumes are set to jump substantially over the coming week, with 214 properties across Brisbane set to go under the hammer, so it will be interesting to see if auction clearance rates improve over the coming week.

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Compared to the previous week, Adelaide’s clearance rate was recorded at a much lower level, with the preliminary clearance rate for the city coming in at 59.3%, compared to a final clearance rate of 70.0% over the preceding week. The number of auctions that took place across the city also dropped over the week, from 95 the week prior to 80 last week.

While this is the lowest clearance rate recorded across the city so far this year, at the same time last year, the auction clearance rate (53.3%) was lower, while there were more auctions held across the capital (110).

20140323 Adelaide

Auction markets across the remaining capital cities (Perth, Hobart, Canberra and Darwin) tend to be very small with only a small number of auctions held each week. Last week we saw 30 auctions across Perth with a clearance rate of 57.1%, 25 auctions across Hobart with a clearance rate of 54.5% and 57 auctions in Canberra with a clearance rate of 53.3%. There were only three auctions recorded in Darwin last week, with no successful results.

Currently, RP Data is tracking 2,845 capital city properties that are scheduled to be taken to auction over the coming week, making this the busiest week for auctions so far this year.

Melbourne auction commentary provided by Robert Larocca, RP Data’s Victorian housing market specialist

Shana Miller

Shana Miller

Shana Miller is a research analyst with RP Data.

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