Melbourne auctions fall after Victoria reserve rule

Victoria recorded fewer auctions last week as Melbourne's auction volumes fell sharply, coinciding with the introduction of reserve price disclosure requirements in the state, according to Cotality.

Across the combined capital cities, 1,423 homes went to auction, down 18.6% from 1,749 the previous week and 45.8% from 2,626 in the same week a year earlier. Based on 1,084 collected results, the weighted average preliminary clearance rate across the capitals rose to 51.2% from 48.8% a week earlier.

The result was the highest preliminary clearance rate in four weeks, although spring-to-date performance remains slightly behind winter. So far this spring, the preliminary clearance rate has averaged 52.0%, compared with a winter average of 52.3%.

Melbourne accounted for much of the weekly decline in activity, hosting 500 auctions, down from 703 a week earlier and well below the 1,142 recorded in the corresponding week last year.

That left Melbourne responsible for 203 of the combined capitals' 326 fewer auctions over the week. Its preliminary clearance rate rose to 56.2% from 54.8%, based on 411 collected results, also the city's highest reading in four weeks.

Sydney hosted the most auctions among the capitals last week, with 574 homes taken to market. That was 9.2% lower than the 632 recorded a week earlier and 46.8% below the 1,079 auctions held in the same week last year.

Sydney's preliminary clearance rate increased to 54.6% from 52.9%, but remained below the city's spring-to-date average of 55.5%.

Brisbane recorded the weakest preliminary clearance rate among the capitals at 31.5%, with 35 successful results from 111 reported. That was up from 21.4% the previous week but well below the 67.8% recorded in the same week last year.

Auction volumes in Brisbane also eased, with 164 homes taken to market compared with 197 a week earlier and 200 in the corresponding week last year. By contrast, Adelaide was the only mainland capital to post a year-on-year increase in auction numbers.

The South Australian capital held 119 auctions, down from 138 the previous week but up 35.2% from 88 a year earlier. Its preliminary clearance rate fell to 36.4% from 46.8%, leaving it below the city's spring-to-date average of 44.6%.

Canberra recorded the strongest preliminary clearance rate among the capitals at 65.9%, up 29.5 percentage points from the previous week's 36.4% and the city's best outcome since mid-April.

The ACT market held 52 auctions, down from 65 a week earlier and 103 in the same week last year. Perth recorded 13 auctions, with 11 results reported and four successful, while Tasmania had one auction.

Victoria focus

Victoria was at the centre of the latest shift in auction activity, with Melbourne's decline much steeper than falls elsewhere. Since mid-August, auction volumes across the capitals have been more than 30% lower than in the equivalent week a year earlier, and last week's fall was the largest over that period.

Annabelle Mezieres, Economist at Cotality, said: "Auction market activity remained subdued last week, with fewer auctions held and a higher preliminary clearance rate."

Melbourne's decline has drawn attention because it came as reserve price disclosure requirements took effect in Victoria. Activity fell in the first week of the change, while the city's early clearance rate rose.

About 1,240 auctions are scheduled across the combined capitals this week, which would represent a further 12.9% decline from the 1,423 held last week. In Melbourne, 489 auctions are scheduled, about 70% fewer than in the corresponding week last year.