Auction clearance rate rises as Sydney overtakes Melbourne

The combined capital city auction clearance rate rose to 47.6% in the week ending 18 October, its highest level since mid-September.

Auction volumes remained weak, with 1,414 homes taken to auction across the capitals. That was down 19.2% from 1,749 the previous week and 46.2% from 2,626 a year earlier.

Sydney was the largest auction market last week, overtaking Melbourne after hosting 570 auctions compared with 495 in the Victorian capital. A week earlier, Melbourne had led with 703 auctions against Sydney's 632.

Sydney's final clearance rate climbed to 50.4%, its highest in five weeks. Even so, activity remained well below last year's levels, with auction volumes 47.2% lower than the 1,079 held in the same week and the clearance rate 17.8 percentage points below the 68.2% recorded then.

Melbourne's auction market was closely watched because it was the first week under Victoria's new reserve price disclosure regulations. Auction volumes fell 29.6% from the previous week and were less than half the number seen a year earlier, although the final clearance rate edged up to 51.7% from 49.8%.

Cotality said it was too early to separate the effect of the new rules from broader market weakness. It also noted that about 740 auctions were scheduled in Melbourne for the following week, suggesting the decline may reflect short-term disruption rather than a lasting shift away from the auction channel.

Across the capitals

Outside the two largest markets, results were mixed. Adelaide hosted 121 auctions, down 12.3% from the week before but 37.5% higher than a year earlier. Its clearance rate fell to 35.5% from 44.9% and was well below the 74.7% recorded in the corresponding week last year.

Brisbane recorded 160 auctions, down from 197 a week earlier. Its clearance rate improved to 29.6% from 21.8%, but remained well below the 67.8% recorded at the same point last year.

Canberra posted the strongest clearance rate among the capitals at 63.0%. That was up from 38.5% the previous week and slightly above the 61.2% recorded a year earlier, making it the only capital city to post a higher clearance rate than in the corresponding week last year.

Perth saw five of 13 auctions clear, compared with three of 14 the week before. Tasmania recorded one auction, which did not result in a sale.

The annual slowdown was concentrated in Melbourne and Sydney. Together, the two cities accounted for 1,156 fewer auctions than in the same week last year, making up most of the national decline.

Spring market

In the week ahead, scheduled auction volumes are expected to rise across most capitals, although the spring market remains subdued by historical standards. There are 1,869 auctions currently scheduled across the combined capitals, up 32.2% from the 1,414 held last week but still 42.2% lower than the 3,236 held in the comparable week last year.

Melbourne is expected to return to the top spot with 744 scheduled auctions, up 50.3% from the 495 held last week. Those additional 249 auctions account for more than half of the national week-on-week increase of 455.

Sydney has 701 auctions scheduled, up 23.0% from the 570 held last week, though still 26.8% below the 957 recorded a year earlier. Melbourne and Sydney together are set to account for 1,445 of the 1,869 auctions scheduled nationally.

Brisbane is also expected to see a busier week, with 204 homes scheduled for auction, up 27.5% from last week and 8.5% higher than in the same week last year. Adelaide's activity is forecast to rise to 142 auctions, while Canberra is expected to host 61 and Perth 17. No auctions are scheduled in Tasmania.

Scheduled auction volumes are higher than the previous week in every capital except Tasmania. Compared with a year earlier, five of the seven capitals have fewer auctions scheduled, Brisbane has more and Perth is unchanged.

Cotality estimates that about 1,800 homes are scheduled for auction in the following week, with Melbourne expected to fall back to around 490 because that week includes the Saturday before Melbourne Cup Day.