Melbourne's preliminary clearance rate the lowest of the year so far: RP Data's national auction market wrap

There were 2,669 auctions held across the combined capital cities last week, having fallen from 3,039 over the previous week.

While volumes were down when compared to the previous week, it is expected that this coming week will change that with auction volumes set to rise by 23%. Last week the preliminary auction clearance rate was recorded at 67.3% across the capital cities, compared to a final auction clearance rate of 67.7% the previous week.

At the same time last year, there were 1,308 capital city auctions and the final auction clearance rate was recorded at 61.7%.

In similar fashion to previous weeks, Sydney has recorded the strongest capital city auction clearance rate at 75.4% based on preliminary collection. There were 1,124 auctions held across the city last week, compared to 1,163 the previous week when the final auction clearance rate was recorded at 75.9%.

It is probably a good time to make mention of the fact that we have noticed over the past few weeks that we are seeing some downward revision each week when Sydney’s final results are being calculated. This is more than likely due to the reporting culture of auctions, where agents hold off on reporting their successful auction until they can confirm that no after auction result has been obtained. Over the same week last year, there were 528 Sydney properties taken to auction with 66.4% of these recording a successful result.

While Sydney’s auction market showed significant strength over the first quarter of 2014, it is interesting to see that this aligned with overall market performance. According to the RP Data-Rismark Daily Home Value Index, Sydney dwelling values increased by 4.4% over the March 2014 quarter. Based on the most recent weekly update, across the private treaty market, Sydney homes are currently selling at the fastest rate of any capital city.

For Melbourne there were 1,204 auctions across the city last week with a preliminary clearance rate of 63.4% recorded from 960 auction results compared to 66.9% recorded last weekend and 63.2% this weekend last year. Over March 2014 the clearance rate was 69.9% from 5,322 auctions.

House and unit values are definitely rising but the high auction volumes are continuing to provide buyers with increased opportunity which is also likely contributing to a lower clearance rates as buyers have a greater number of auction properties to choose from.

Last week across the Brisbane auction market we saw conditions improve with the preliminary auction clearance rate recorded at 57.9%, with 122 Brisbane auctions held over the week.

Despite the strengthening clearance rate, last week was a sharp fall in Brisbane auction volumes after the busy week prior when there were 238 auctions held and a clearance rate of 47.1%, however, over the coming week volumes are set to ramp up again, with 218 Brisbane auction scheduled so far.

When we look at the Brisbane auction market at the same time last year, there were significantly less auctions (92) while the clearance rate was recorded at 49.3%, which is generally on par with the current market performance.

There were 98 Adelaide properties taken to auction last week, with the preliminary clearance rate coming in at 67.3%, compared to the previous week when the final clearance rate was recorded at 55.6% across 107 auctions.

At the same time last year, there were 54 Adelaide properties auctioned over the week, with half of the properties recording a successful result at the time of reporting.

Once again, auction activity across the other capital cities was much more subdued and again, results were mixed.

There were 33 auctions held in Perth last week and the preliminary clearance rate was recorded at 26.7%. Across Hobart, 22 properties went to auction with a clearance rate of 50.0% and a 43.8% clearance rate in Canberra across 66 auctions.

There were 8 auctions held in Darwin last week and so far RP Data has captured a result for 5 of these auctions. At this point, no successful results have been recorded.

There are currently 3,271 auctions being tracked by RP Data over the coming week, in what is set to be a busy week leading up to Easter.

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