Australia auction volumes rise as clearance rates fall

Capital city auction volumes in Australia rose to 1,882 last week, while the preliminary clearance rate fell to 48.4%, according to Cotality.

Auction numbers across the capitals increased 33.1% from the previous week, although volumes remained 41.8% below the same week a year earlier. It was the second straight week in which capital city auction activity was more than 40% lower than the comparable period last year.

Sales outcomes also weakened as volumes rose. Fewer than half of reported auctions were successful, down from a preliminary clearance rate of 51.2% a week earlier.

The clearance rate has now been below 50% in three of the past four weeks, pointing to continued pressure on sellers as more properties come to market during the spring selling season.

Melbourne recorded the largest weekly rise in auction numbers, with 831 auctions, up 68% from 495 the previous week.

Even so, Melbourne's auction activity was still 54.7% lower than in the same week last year. Its preliminary clearance rate slipped 1.4 percentage points to 54.8%, slightly below the city's spring-to-date average of 55.4%.

Cotality attributed part of the annual drop in Melbourne listings to softer selling conditions. It also said Victoria's reserve price transparency requirements had contributed to a period of adjustment as vendors considered how to sell their homes.

Sydney, the second-largest auction market, hosted 631 auctions last week. That was 10.7% higher than the previous week but 34.1% lower than a year earlier.

Its preliminary clearance rate fell to 48.2%, the first time in 12 weeks that Sydney had dropped below 50%. The result was only slightly above the recent low of 47.3% recorded in June.

Brisbane weakens

Brisbane posted the lowest preliminary clearance rate of any capital city at 25.2%, its fourth-lowest preliminary result of the year.

A total of 200 homes went to auction in Brisbane, up 25% from the previous week. Unlike most capitals, Brisbane also recorded an annual rise, with volumes up 6.4%.

In Adelaide, 141 homes went to auction, up 16.5% from the previous week. That was 2.1% lower than the same week last year, while the city's preliminary clearance rate was 42.5%, below its spring-to-date average of 44.3%.

Mixed smaller markets

The Australian Capital Territory's preliminary clearance rate fell 13.8 percentage points to 52.1%. Auction volumes reached 60, up 11.1% week on week, although they were one-third lower than a year earlier.

Perth recorded 19 auctions, with half of reported results marked as successful. Tasmania did not hold any auctions during the week.

The latest figures suggest sellers are returning in greater numbers, but buyer demand has not kept pace across several major cities. The gap between rising volumes and falling clearance rates was most visible in Sydney and Melbourne, which together accounted for the bulk of auction activity.

Melbourne alone made up more than two-fifths of all auctions held across the capitals, while Sydney contributed roughly a third. Performance in those two cities therefore had a substantial effect on the national preliminary clearance rate.

Brisbane's result stood out because of the sharp contrast between stronger listing volumes and a notably weak sales conversion rate. Adelaide and the Australian Capital Territory also reported softer outcomes than their recent seasonal averages or prior-week readings.

The data indicates that auction markets remain uneven across Australia, with year-on-year volumes still significantly lower in most capitals despite the weekly lift.