Capital city auction clearance rate falls to 46%

The combined capital city auction clearance rate fell to 46.0% in the week ended 27 September, according to Cotality. That was down 22.7 percentage points from the same week a year earlier.

The result was also lower than the previous week's 49.1%, leaving fewer than half of homes selling at auction across the capitals. Auction volumes fell 23.8% week on week to 1,403 from 1,841.

More than twice as many homes were passed in as withdrawn, with 502 passed in and 248 withdrawn. In most cases, unsold properties reached auction but did not attract a bid at or above the reserve.

Every mainland capital recorded a lower clearance rate than a year earlier. Total auction volumes were also down 19.1% from the same week last year, when 1,735 auctions were held.

Sydney was one of only two mainland capitals to record a week-on-week rise in its clearance rate. The rate increased 2.2 percentage points to 48.4% from 46.2%, while auction volumes rose 36.0% to 774 from 569.

Despite the weekly increase, Sydney remained well below last year's level. The city hosted 1,164 auctions in the comparable week a year earlier, leaving current volumes 33.5% lower, while the clearance rate was 21.8 percentage points below 70.2%.

Melbourne moved the other way. Its clearance rate fell 6.3 percentage points to 47.9% from 54.2%, while auction volumes dropped sharply to 284 from 918.

The lower Melbourne total was linked to the AFL Grand Final and the public holiday the day before. The same week last year also included the Grand Final, when Melbourne recorded a 64.3% clearance rate across 224 auctions.

Canberra posted the highest clearance rate among the capitals at 51.9%, though that was down 1.7 percentage points from the previous week. Auction volumes rose 44.6% to 81 from 56.

Brisbane recorded the lowest clearance rate at 32.9%. Even so, that was 1.5 percentage points higher than the previous week's 31.4%. The city held 140 auctions, down 20.5% from 176.

Excluding Tasmania, which had no auctions the previous week, Brisbane and Sydney were the only capitals where the clearance rate improved week on week. Adelaide's clearance rate fell 8.8 percentage points to 37.6%, while volumes slipped 9.8% to 101 from 112.

Perth recorded eight sales from 21 auctions, for a clearance rate of 38.1%. A week earlier, it recorded a 50.0% clearance rate from 10 auctions.

Tasmania held two auctions, with one property sold. Over the year, the drop in capital city auction volumes was concentrated in Sydney, which recorded 390 fewer auctions than in the same week last year.

Outside Sydney, auction volumes across the other six capitals rose by 58 to 629 from 571 a year earlier. Canberra held 35 fewer auctions than a year ago and Brisbane held eight fewer, while Melbourne, Adelaide, Perth and Tasmania recorded higher volumes.

Adelaide recorded the steepest annual fall in clearance rate among the capitals, dropping 36.8 percentage points to 37.6% from 74.4%.

Brisbane followed with a 31.0 percentage point annual fall, ahead of Perth at 21.9 percentage points, Sydney at 21.8, Melbourne at 16.4 and Canberra at 12.8.

This week

Looking ahead, 1,252 homes are scheduled for auction across the capital cities this week. That is 10.8% below last week's 1,403 and 36.1% fewer than the 1,958 held over the same long weekend last year.

This will be the first auction weekend since the Reserve Bank lifted the cash rate to 4.60%, its fourth increase this year. In Victoria, new underquoting rules have taken effect, requiring agents to publish the vendor's reserve price at least seven days before auctions held from 16 October.

Sydney is scheduled to host 353 auctions over the long weekend, down 54.4% from the 774 held last week and 30.9% below the 511 held over the same long weekend last year. Melbourne is expected to host 644 auctions, up 126.8% from last week's reduced level but 44.7% lower than the 1,164 recorded in the same week a year earlier.

Canberra has 34 auctions scheduled, compared with 81 held last week and 57 in the same week last year. Adelaide is expected to host 73 auctions, 27.7% fewer than last week but 12.3% more than a year earlier.

Brisbane's scheduled auctions are unchanged at 140, which is 5.4% lower than the 148 held a year earlier. Perth has six auctions scheduled, down from 21 last week and 13 a year earlier, while Tasmania again has two auctions scheduled.

Annabelle Mezieres, Economist at Cotality, said the weighted average clearance rate across the combined capitals was 46.0% last week, 22.7 percentage points lower than in the same week last year.