Australia auction clearance rate stays below 50 per cent

Australia's combined capital city auction clearance rate fell to 49.3% in the latest week, remaining below 50% in all but one of the past 11 weeks, according to Cotality.

A total of 1,431 auctions were held across the capitals, down 2.1% from 1,462 the previous week and 32.6% from 2,122 a year earlier. The figures suggest the spring selling season has started with fewer homes going under the hammer and a smaller share selling.

Melbourne remained the busiest auction market, with 656 auctions. That was up 1.9% from 644 the week before, while the city's clearance rate improved to 54.6% from 53.7%.

Sydney also recorded a higher clearance rate, rising to 52.5% from 51.5%, while auction volumes edged down 1.6% to 501 from 509.

Elsewhere, conditions were weaker. Adelaide held 94 auctions, down from 102, and its clearance rate fell to 36.2% from 46.1%, the sharpest weekly decline among the larger capitals.

Brisbane recorded the lowest clearance rate of any capital city at 26.0%. The city hosted 131 auctions, down from 146 the previous week.

Canberra's auction volume fell to 35 from 50, while its clearance rate eased to 37.1% from 40.0%. In Perth, four of 13 auctions resulted in a sale, for a clearance rate of 30.8%. Tasmania's only auction did not sell.

Seller pressure

Cotality's data showed 480 homes were passed in at auction across the combined capitals, nearly double the 245 withdrawn. That suggests weaker results are being driven more by homes failing to meet bids on the day than by vendors pulling listings before auction.

"So, the weak clearance rate is more about properties failing to sell under the hammer than vendors withdrawing prior to auction, suggesting that vendors' price expectations continue to exceed buyers' willingness to pay," said Annabelle Mezieres, Economist, Cotality.

The latest result also marks a sharp deterioration from a year earlier. In the same week last year, the weighted average clearance rate was 70.0%, leaving the current figure 20.7 percentage points lower.

Volumes have also fallen sharply over that period. The national auction count is down by almost a third from the same week last year, underlining a more cautious market as spring begins.

Spring listings

For the current week, 1,615 homes are scheduled for auction across the capital cities. That is 12.9% higher than the 1,431 held last week, but still 32.8% below the 2,402 auctions recorded in the equivalent week a year earlier.

Melbourne is again expected to be the largest market, with 676 auctions scheduled. That is 3.0% above last week's 656, but 45.5% lower than the 1,240 held a year earlier, the steepest annual decline among the capitals in this set of figures.

Sydney is due to host 616 auctions, up 23.0% from 501 last week. Even so, that total remains 25.7% below the 829 auctions held in the same week last year.

Brisbane is one of the few cities to post annual growth in scheduled auctions. The city is expected to hold 169 auctions, up 29.0% from 131 last week and 16.6% above the 145 recorded a year earlier.

Perth is the only other capital city with scheduled auction volumes above year-ago levels, although it remains a relatively small market. Twenty homes are due to go to auction there, compared with 13 last week and 11 a year earlier.

Adelaide is expected to move in the opposite direction, with 79 auctions scheduled, down 16.0% from 94 last week and 19.4% below the 98 held a year earlier. Canberra is set for 55 auctions, up from 35 last week but still below the 79 recorded in the same period last year, while Tasmania has no auctions scheduled after one in the previous week.

All capitals except Brisbane and Perth are expected to record fewer auctions than in the same week last year. The national comparison suggests that while listings are rising in line with the usual seasonal pattern, many vendors are still choosing not to test the auction market.

"The week-on-week increases follow the typical seasonal rise in listings, while the year-on-year decline shows that fewer vendors are choosing to bring their homes to auction than at this time last year," said Mezieres.