Fewer homes went to auction across the combined capital city markets during the September quarter and clearance rates softened further, in line with a fall in values, rising interest rates and cautious buyers.
CoreLogic’s Quarterly Auction Market Review shows 23,087 properties across the combined capitals went under the hammer in the September quarter, the lowest figure since the March quarter in 2021.
Numbers were down compared to the three months to June when 31,439 auctions were held, which followed the busiest March quarter on record when 23,748 homes went under the hammer.
CoreLogic Research Director Tim Lawless said lower auction volumes were indicative of weaker consumer sentiment and fewer overall listings in the market nationally.
“Lower auction volumes are another indicator of the rapid change in market conditions as sellers also adjust to increasing interest rates and fewer buyers,” Mr Lawless said.
“We’re also seeing similar trends across new supply of ‘for sale’ stock in general. Seasonally, spring is usually the peak time for sellers to list their property, but this hasn’t materialised, with the majority of cities and rural areas yet to see the normal seasonal upswing in freshly listed properties hitting the market.”
Auction clearance rates were also weaker with 56.4% of reported auctions successfully sold under the hammer in the three months to September 2022, the lowest quarterly clearance rate since June 2020 (47.9%) when the initial phase of COVID related lockdowns were implemented.
The results were down 15.2 percentage points from the same period last year (71.7%) and on the June quarter, when 60.8% of reported auctions were successful.
“Clearances rates have been falling each quarter just as the rate of growth in property values has slowed,” Mr Lawless said.
“The combined capital city clearance rate hit a record peak of 80.0% in March 2021 and has gradually declined ever since. However, the monthly trend in clearance rates has shown a consistent rise in auction clearance rates, with the weighted average capital city clearance rate firming around 60% each week in September. It will be interesting to see whether clearance rates continue to hold as we move through what is traditionally the busiest quarter of the year.”
Of the capital cities, Adelaide recorded the highest clearance rate this quarter (67.7%), followed by Tasmania (58.8%), Melbourne (58.5%) and Canberra (57.5%), noting the volume of auctions in Tasmania is extremely low.
Sydney recorded a clearance rate of 55.0% over the quarter, while Brisbane (43.9%) and Perth (38.8%) both came in under 50.0%.
In terms of auction activity, Melbourne was the busiest auction market, with 9,107 homes going under the hammer, followed by Sydney (8,776) and Brisbane (1,970). There were 1,810 auctions in Adelaide, 1,228 in Canberra, 179 in Perth and 17 auctions held in Tasmania over the September quarter.
“After the volume of auctions was consistently higher than a year ago through the first four months of the year, every capital city has seen a marked fall in auction activity in the September quarter,” Mr Lawless said.
“With auction clearance rates generally tracking at below average levels, it’s likely more vendors are opting to sell via private treaty rather than auction as fewer competitive bidders could make the auction process less effective at achieving the best possible price.”
Auctions that pass in or are withdrawn are counted as unsuccessful auctions. Tougher selling conditions also resulted in a higher withdrawal rate of 13.8% in the September quarter across the combined capitals, up from 12.8% in the June quarter. The September 2021 quarter saw a withdrawal rate of 18.3% due to COVID-related movement restrictions and city lockdowns in many parts of the country.
Sydney sub-region summary
All 15 of Sydney’s sub-regions recorded a fall in the volume of auctions over the September quarter compared to the previous three-month period. North Sydney and Hornsby had the highest number of auctions (1,382) this quarter, while all other sub-regions held fewer than 1,000 auctions. Sydney’s Eastern Suburbs recorded a clearance rate of 59.9% for the period, marginally beating out the Inner West on 59.4%. Overall, Sydney’s auction clearance rate over the September quarter was 55.0%, down from 57.2% in the previous quarter.
Sydney’s withdrawal rate rose to 20.8% in Q3, up from 19.4% in the June quarter. The proportion of homes sold prior to auction was 46.4%, down slightly from June and the same period in 2021.
Melbourne sub-region summary
In Melbourne, all nine sub-regions saw fewer homes taken to auction over the September quarter while clearance rates dropped across all but one of the areas compared to Q2. Melbourne’s Inner East region, where 65.8% of reported auctions were successful, recorded the highest clearance rate for the period, followed by the city’s Outer East (64.4%).
Melbourne’s clearance rate was 58.5% compared to 61.1% in June and 62.8% for the same quarter in 2021. Volume fell sharply to 9,107 homes, down from 13,818 over the previous quarter and 9,493 in September 2021 quarter, which included the city’s sixth COVID lockdown. Melbourne’s withdrawal rate was 9.3%, lower than June (9.6%) and the surging figures recorded at the same time last year amid the lockdowns.
Highest volume and clearance rates
Reservoir in Melbourne’s north again had the highest auction volume of any capital city region with 199 properties auctioned in the September quarter, down from 255 in the three months to June. Burwood East, also in Melbourne, had an 88.0% clearance rate for the quarter, the highest of any capital city region with 22 of the 25 properties sold under the hammer.
Newcastle and Lake Macquarie was the best performing regional auction market with a clearance rate of 55.1% from 334 auctions, down from 62.2% in the June quarter. The Gold Coast remains the busiest regional centre with 853 auctions held in the September quarter, compared to 902 in the three months to June.
A full city-by-city suburb analysis, where at least 20 auction results were reported over the September quarter, can be found in the report.
For more information or to download a copy of the report, visit www.corelogic.com.au/reports/quarterly-auction-review.
CoreLogic Australia