Australia auction clearance rates fall to October low

Auction clearance rates across Australia's combined capitals fell to 43.6% in the final week of October, according to Cotality. October also recorded the lowest monthly average clearance rate of the year.

The weighted average final clearance rate dropped 4.0 percentage points from 47.6% a week earlier, marking the weakest weekly result since late June, when it was 42.3%. Across the four weeks of October, clearance rates averaged 45.2%, below June's 45.7% and well under February's 66.4% peak.

Auction volumes moved in the opposite direction. There were 1,871 auctions across the combined capitals in the latest week, up 32.3% from 1,414 the previous week, though still 42.2% lower than the 3,236 recorded in the same week a year earlier.

Melbourne accounted for most of the weekly rise in activity, hosting 831 auctions, up 67.9% from 495 the previous week. Cotality said vendors appeared to have brought auctions forward ahead of the Melbourne Cup Day public holiday.

Despite the larger number of listings, Melbourne posted the strongest clearance rate among the capitals at 50.2%, down 1.5 percentage points from the previous week.

Sydney also recorded more homes going to auction, with volumes up 9.3% to 623, but its clearance rate fell more sharply, dropping 8.7 percentage points to 41.7%.

Conditions were weaker across several smaller capitals, with fewer than half of homes taken to auction selling in Brisbane, Adelaide, Perth and Canberra.

Brisbane recorded the lowest clearance rate at 26.3%, down from 29.6% a week earlier, while auction numbers rose 24.4% to 199. Adelaide's rate edged down to 35.3% from 35.5% as volumes increased to 139 from 121.

Canberra recorded the steepest weekly fall in clearance rates, down 16.3 percentage points to 46.7% from 63.0%. The capital held 60 auctions, compared with 54 the previous week.

Perth was the only capital to record an improved clearance rate, with nine of 19 auctions selling, compared with five of 13 a week earlier. Tasmania held no auctions after one the previous week.

Year-on-year falls

The latest figures also showed how far the market has softened from a year ago. Every capital that held auctions recorded a lower clearance rate than in the same week last year.

The largest annual declines were in Brisbane and Adelaide. Brisbane's rate fell from 65.4% a year earlier to 26.3%, while Adelaide's dropped from 73.6% to 35.3%.

Sydney's clearance rate fell from 65.3% to 41.7%, while Melbourne's declined from 67.4% to 50.2%. Canberra and Perth recorded smaller annual falls, with Canberra down from 61.1% to 46.7% and Perth from 58.8% to 47.4%.

Volumes were also notably lower than a year ago, with Melbourne and Sydney accounting for nearly all of the decline. Between them, the two largest markets recorded 1,339 fewer auctions out of a total national fall of 1,365.

Melbourne held 831 auctions, less than half the 1,836 recorded in the same week last year. Sydney's auction volume fell 34.9% to 623 from 957.

Only Brisbane and Perth posted annual increases in auction numbers, with 11 and two more auctions respectively than a year earlier. Canberra recorded 30 fewer auctions, Adelaide five fewer and Tasmania four fewer.

Next week's outlook

For the current week, 1,793 homes are scheduled for auction across the combined capitals, according to Cotality. That is 4.2% lower than the 1,871 auctions held the previous week and 15.0% below the 2,109 held in the same week last year.

Melbourne is expected to record the sharpest weekly drop in activity, with 477 auctions scheduled, down 42.6% from 831. Cotality attributed the lower volume to the Melbourne Cup Carnival.

Sydney is set to become the larger of the two main markets this week, with 817 homes scheduled for auction. That is 31.1% higher than last week's 623, though still 25.3% below the 1,094 recorded a year earlier.

Among the smaller capitals, Brisbane has 234 auctions scheduled, Adelaide 151, Canberra 87 and Perth 24, while Tasmania has three. Apart from Melbourne, every capital is expected to host more auctions than in the previous week.

Annabelle Mezieres, Economist at Cotality, said: "The spring auction market has eased this week, with 1,793 homes scheduled for auction across the combined capitals."