September's supply weakened capital city auction success: Dr Andrew Wilson

September's supply weakened capital city auction success: Dr Andrew Wilson
September's supply weakened capital city auction success: Dr Andrew Wilson

Australian capital city auction markets have weakened over September, according to the Domain Australian Home Auction Report for September 2015.

The report, compiled by property website Domain.com.au, suggests that clearance rates have fallen in most capitals under the impact of record numbers of early spring listings.

“The first month of spring has provided mixed results, with all major capital cities except Adelaide reporting decreases in clearance rates over the month. September home auction activity is now generally tracking below last year’s September levels,” Domain senior economist Dr Andrew Wilson said.

“While clearance rates may be down, auction prices have either risen or remained steady across the cities, reflecting the seasonal effects of higher-priced auction sales.

“Record-high volumes of auctions will continue to test capital city markets for the remainder of the year, providing greater competition amongst sellers and more choice for buyers. This is likely to continue putting downward pressure on clearance rates – particularly in Sydney, and to a lesser degree Melbourne.”

SYDNEY 

Sydney’s September auction clearance rates dropped to 69.8 per cent, from 73.9 per cent in August. They are now sitting clearly below the 76.9 per cent recorded in September 2014. 

At 69.9 per cent, Sydney’s September result is the lowest for the year so far and the lowest September result since 2012. 

According to Domain’s Dr Andrew Wilson, Sydney’s auction clearance rates have fallen sharply since the all-time record of 83.3 per cent was recorded in May this year.

“The high volume of listings will continue to test the Sydney market. September alone recorded a record average of 859 weekend auctions. This is well ahead of the August average of 738 weekend auctions and the 590 conducted over September 2014,” Dr Wilson said.

  • Sydney’s September median auction price increased from $1,090,000 to $1,151,000 year-on year. This reflects the typical early spring impact of increased volumes of higher priced properties engaging the market. 
  • Sydney auction prices have now increased by 15.8 per cent over the past year but the year-on-year growth rate comparisons have now fallen solidly over the past four months.

MELBOURNE

Melbourne’s September auction clearance rate dropped slightly to 73.2 per cent, from 75.2 per cent recorded in August 2015. The result is slightly below the 73.7 per cent which recorded in September last year. This September clearance rate result is the lowest rate recorded by the local market for the year so far. 

According to Dr Wilson, the lower clearance rates may reflect the influence of a record surge in early spring listings.

“With a remarkable number of auctions – nearly 1,000 per weekend over the month of September – Melbourne’s auction market is well ahead of where it was last year. The city averaged 977 auction listings every weekend over September, up from the average of 830 over August and significantly higher than the average of 640 over September last year.”

  • Melbourne’s median auction price increased by an incredible 13.1 per cent year-on-year to reach a September average of $820,000.
  • The rising numbers of higher-priced, inner suburban homes offered for sale over September can account for the strong increase in the average September median auction price.

BRISBANE

Just like the majority of other capital cities, Brisbane’s auction clearance rate fell sharply over September, reversing the rising trend of recent months. The local auction clearance rate fell from 57.4 per cent in August 2015 to just 46.2 per cent. This is just slightly below the average auction clearance rate of 46.3 per cent recorded in September last year.

Dr Andrew Wilson said that rising auction volumes have been a characteristic of the Brisbane market for most of this year and September clearly continued the trend. 

“Brisbane averaged 123 auctions per weekend over September - a significant increase from the average of 106 auctions per weekend in August. This was well ahead of the 99 averaged over September last year.”

  • Brisbane’s median auction price remained steady over September, sitting at an average of $700,000. This is a slight (1.1 per cent) decrease from the average median auction price of $708,000 recorded over September last year. 
  • Brisbane is the only capital to record a fall in auction prices over the past year. 

ADELAIDE 

It was good news for property sellers in Adelaide, with the city’s auction market bucking the downward trend of other capital cities. Adelaide recorded a stronger month for auction activity, with the September clearance rate reaching 65.3 per cent. This result is slightly ahead of the 65.2 per cent recorded in August and sits just below the 66 per cent auction clearance rate recorded in September 2014.   

Domain’s Dr Andrew Wilson said that the Adelaide’s September clearance rate is the highest recorded for the city this year and is reflective of a steady revival of market confidence over the past year.

“Not only was there an increase in Adelaide’s clearance rates over September, but there was also a significant increase in auction volumes. This reflects the growing confidence of sellers in the local market conditions.

“Adelaide saw an average of 69 auctions each weekend over September. This is an increase from ans average of 57 auctions per weekend over August and well ahead of the 49 averaged over September last year. Sharply higher volumes are however proving no barrier to higher clearance rates.”

  • Adelaide’s median auction prices continue to increase steadily, reflecting the increasing strength of the local market – second now only to Sydney. 
  • Adelaide’s September auction median price of $597,500 was well ahead of the $531,000 median reported over August. The result was 14.9 per cent higher than the $520,000 reported a year ago. 

CANBERRA 

Canberra’s auction market tracked backwards over September, following the strong clearance rate result recorded in August. September’s auction clearance rate of 64.3 per cent was down from the 70.7 per cent recorded the previous month. The result, however, remains well ahead of the 56.3 per cent recorded in September last year.

Dr Wilson said that the despite the decrease in clearance rate from August, the September result was positive outcome.

“The rate recorded over August was the highest monthly result for over five years. The underlying growth trend for the auction market remains encouraging and indicates the consolidation of solid housing market activity generally in Canberra this year.”

  • Auction volumes continue to rise in Canberra with 47 listings averaged each weekend over September – up from the 40 average over August and ahead of the 42 averaged over September last year.
  • Canberra’s media auction prices fell marginally over September – down from $685,000 over August to $675,000. Auction prices however remain 3.5 per cent higher than the $652,000 recorded over September last year.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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Clearance Rate Housing Sale

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