The volume of scheduled auctions is set to reach new highs across Sydney, Canberra and Adelaide this week, marking the busiest auction week for the combined capitals since CoreLogic records commenced in 2008.
After delays from the extended lockdowns in Sydney, Melbourne and Canberra, the spring selling season is going full steam ahead with 4,354 capital city homes set to go under the hammer this week. This week marks the first time the number of auctions held across the combined capitals will exceed 4,000 and is expected to overtake the week ending 25th March 2018 (3,990) as the busiest auction week on record.
A combination of seasonal factors and COVID-19 lockdowns saw the volume of auctions fall through July and August, before hitting a recent floor in early September, when 1,423 homes were taken to auction. Since then the number of auctions held has risen by approximately 10% a week, to record a total increase of more than 200%. Compared to last week, this week’s volume of auctions is set to be up 17.0% (3,720) and more than double the number recorded this time last year (2,168).
As the volume of auctions has trended higher, the capital city clearance rate has trended downwards from its recent peak of 83.2% in early October, to 70.3% this week. Despite the recent fall, clearance rates have remained above the combined capitals five-year average of 64.2% since late August. This time last year 70.6% of the auctions held were successful.
Comparing this week’s four-week rolling count of auctions to a lagged four-week count of new listings, auctions are set to account for 43.8% of property listings, up from 32.3% in late September. As a means of selling, auctions are becoming more popular, with the current climate of low listing volumes and strong buyer demand favouring vendors. In Melbourne, the proportion of properties taken to auction is up 22.7 percentage points compared to this time last year at 58.0%, while auctions as a proportion of listings in Sydney have risen by 7.1 percentage points to 55.3%.
The smaller capitals, where auctions have traditionally accounted for a smaller proportion of transactions, have also seen a rise, with the proportion of properties taken to auction doubling in both Adelaide (from 20.3% to 46.5%) and Brisbane (from 10.1% to 21.4%) while Canberra’s auction ratio has risen 18.8 percentage points (from 57.2% to 76.1%). Compared to this time last year (when the portion of auctions as new listings was 29.4%) the number of capital city auctions as a proportion of new listing has increased by 14.4 percentage points.
Predicted auction volumes by capital city, week ending 28 November, 2021
Traditionally the largest Australian auction market, Melbourne is expected to host the most auctions this week, with 1,898 homes going under the hammer. Compared to last week, when 1,657 auctions took place across Melbourne, this week’s volumes are expected to be up 14.5% and are more than double the number of auctions recorded this time last year (909).
Despite having the highest number of auctions of any of the capital cities, Melbourne is one of the few capital cities not set to have its busiest week of the year and is instead recording its fourth busiest week on record and busiest week since late March (1,929).
With an average auction volume in excess of 1,400 for the past eight weeks, Melbourne’s clearance rate has trended downwards, from a recent peak of 85.3% in early October to 67.7% in early November. Over the past two weeks, the downward trend in clearance rates has stabilised around the high 60% to low 70% range, recording a clearance rate of 68.6% last week. This time last year 69.3% of auctions held were successful.
Across Sydney 1,656 auctions are currently scheduled, making this week Sydney’s busiest auction week on record. The volume of auctions across Sydney has trended upwards since COVID-19 restrictions eased in the week ending 3rd October (753), growing by approximately 120%. Last week, Sydney hosted 1,352 auctions, while this time last year 886 homes went under the hammer.
After peaking at 82.8% in the middle of September, when just 661 homes went to auction, Sydney’s clearance rate has weakened to 68.7% last week. Despite this, Sydney’s clearance rate is still above its five-year average of 66.1%. This time last year 72.5% of homes taken to auction returned a successful result.
Smaller Capital Cities
Across the smaller capitals, the volume of auctions has surged. With 800 homes scheduled to go under the hammer, excluding Sydney and Melbourne, this week is expected to be the busiest on record for the combined capital cities.The upward trend in the number of auctions held has been evident since early September, when 386 auctions were held across the smaller combined capitals.
Adelaide and Canberra are each set to record the highest ever volume of auctions, with 308 and 183 auctions scheduled respectively. Perth is expecting its busiest week of the year with 47 homes scheduled for auction, while Brisbane is set for its third-busiest week of the year behind the week ending 14 of November (287) and the week ending 7th of November (263) with 260 auctions planned. Two homes are scheduled to go to auction across Tasmania this week.
The increase in volumes has seen the combined smaller capitals clearance rate ease, last week recording a clearance rate below 80% for the second week in a row (77.5%). Prior to this, the smaller combined capitals maintained a clearance rate above 80% for eight consecutive weeks. Last week, Adelaide recorded the highest clearance rate with 80.3% of auctions ending successfully, followed by Canberra (78.3%) and Brisbane (77.0%)
If previous years are anything to go by, the peak in auction activity for this time of the year generally occurs between the last week of November and the second week of December. Considering housing market conditions remain firmly skewed towards the vendor, it’s likely auction markets will remain buoyant at least through the first two weeks of summer before auction activity slows approaching the festive season.
Traditionally auction markets ramp up in early February and move through another cyclical high leading into Easter. With such strong selling conditions likely to continue once the festive season ends, we could see auction activity ramp up earlier than usual in 2022.