Australia’s auction market is off to a strong start, with easing inflation and the prospect of an earlier than expected rate cut buoying vendor hopes and buyer appetites for an unconditional sale.
CoreLogic tracked 1,671 auctions last week, the second busiest start to the auction season on record. The preliminary clearance rate came in at 73.9%, which was the highest since the week ending August 20 last year and a clear jump on the end of 2023 which saw final clearance rates end sub-60%.
Melbourne (71.9%), Sydney (76.3%), Adelaide (77.6%) and Canberra (80.0%) all recorded a preliminary clearance rate above 70%, with Brisbane not far off at 68.5%.
Across Sydney’s sub-regions, five cracked the 80% mark, including the Northern Beaches (82.4%), Eastern Suburbs (82.1%), Sutherland (81.3%), Inner West (80.0%) and South West (80.0%). Melbourne’s North East (84.2%) and Mornington Peninsula (82.4%) also posted an early clearance rate above 80%.
CoreLogic’s 2023 Auction Market Review released today shows 96,177 homes went under the hammer across the combined capitals last year, an -8.0% drop on 2022 and the lowest number of auctions annually in three years. The 2023 clearance rate was 64.9%, up from 61.2% the year prior.
CoreLogic Economist Kaytlin Ezzy said it appears this year is starting with a step change.
“Contrary to the start of auction season this year, the 2023 auction market had a soft start. The first quarter’s capital city auction numbers fell to levels not seen since the September quarter of 2020, when lockdowns and COVID restrictions hampered auction activity, and remained lacklustre through quarter two.
“At the same time, buyer demand started to normalise after values found a floor in January and prospective buyers sought to enter the market before values recovered. This mismatch between supply and demand saw capital city clearance rates continue to trend higher through the first half of 2023, before exceeding the 70% mark for the first time since February 2022 in May, and holding above 70%for four consecutive weeks,” she said.
Despite four rate hikes through the first half of the year, Q3 saw an uplift in auction activity, with capital city auction numbers rising 22.1% compared to the previous quarter and 14.9% compared to the September quarter of 2022.
Ms Ezzy said it’s likely this unseasonal lift in auction volumes through winter was partly due to a glut in prospective vendors, who had previously delayed selling, attempting to 'beat the rush' by listing before the spring selling season.
“This upward trend continued into Q4, with auction numbers rising 15.4% quarter on quarter and 19.6% compared to the 2022 spring selling season, which really tested the market. This rebalancing of auctions supply saw the combined capitals' clearance rate track lower as negotiating power shifted back in favour of buyers. This saw the success rate fall below the 60% mark over the final two weeks of December.
“Looking at last week’s early results, it’s possible the lower than expected inflation reading and prospect of early rate cuts is already boosting sentiment. The next few weeks should provide further guidance on whether this strong result is simply some early year exuberance or a trend that can persist,” she said.
2023 Auction Market Review highlights
- Melbourne was the busiest auction market in 2023, with 41,302 homes auctioned, down -7.4% on the previous year. Melbourne's annual clearance rate came in at 64.3%, up from the annual result recorded the previous year (61.8%), but below the average weekly rate seen over the past decade (66.8%).
- Sydney recorded both the smallest decline in annual auction activity and the largest improvement in annual clearance rates. There were 36,844 homes auctioned, resulting in an annual clearance rate of 66.9%.
- Across the smaller auction capitals, Brisbane was the busiest market, with 6,831 homes taken under the hammer in 2023, followed by Adelaide and Canberra with 5,967 and 4,333 homes auctioned, respectively.
- Adelaide recorded the highest clearance rate for the second consecutive year, with 73.9% of auctions returning a successful result. Brisbane came in second among the smaller capitals with a clearance rate of 58.7%, followed by Canberra (55.6%).
- Perth saw 661 homes auctioned in 2023, with 45.7% returning a successful result.
- Tasmania saw 24 of the 81 homes taken under the hammer successfully sold at auction.
Download the 2023 Auction Market Review
Meet Kaytlin Ezzy
Economist
As an economist, Kaytlin is a key member within CoreLogic’s research team. Highly efficient and flexible, she specialises in collating large and customised data sets, data visualisation and residential data reports.
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