Auction results are most relevant to the Sydney and Melbourne housing markets where auction sales comprise slightly more than one third of all dwelling sales.
Auction clearance rates are one of the most widely reported housing market statistics, however the reality is that most homes actually don’t sell at auction; they sell via private treaty. The only capital cities where auctions comprise more than one third of all sales is Melbourne and Sydney, where, over the first seven months of the year, auctions accounted for approximately 35% of all home sales. In Perth, auction sales comprised only 1.9% of all sales, 2.9% across Tasmania, 6.4% in Brisbane and just over 11% in Adelaide.
% of all dwellings sold by auction, Feb-Jul 2015
With auctions comprising a reasonable proportion of sales in Sydney and Melbourne, and to a lesser extent, Canberra, the direction of clearance rates can be a useful and timely indicator of housing market conditions in those markets. In the other capital cities, auction results are typically much lower and are generally more indicative of conditions in the premium housing market where most of the auctions tend to be held. In these markets, private treaty indicators such as the average level of vendor discounting and average selling time are more relevant for understanding the balance between buyers and sellers.
Avg vendor discounting Avg days on market
The broad trend in clearance rates is downwards, with the weighted average trending consistently lower since peaking over the last week of March this year at 82% to reach 61% over the past two weeks. Sydney’s clearance rate reached the lowest reading since March 2013 last week with an auction clearance rate of 58%. Melbourne’s clearance rate has also been trending lower, but has showed more resilience than Sydney’s. The clearance rate across Melbourne’s market has been below 70% over the past three weeks, but has held around the mid to high 60% mark.
Weighted average clearance rate, combined capitals
Auction clearance rates, week ending Nov 8, 2015
Importantly, the lower auction clearance rates are occurring at a time when auction volumes are substantially higher than a year ago. Over the first ten weeks of Spring we have recorded 25,727 auctions which is 3,138 more auctions that at the same last year and 22% higher than the ten weeks leading up to Spring. With auction volumes higher, even though the clearance rate is moderating, the raw number of successful auctions has held reasonably firm.
Weekly number of auctions held, combined capitals
With more than 3,000 auctions scheduled for the coming week, the volume of auctions is set to be the second highest so far this year, providing the biggest yet during the spring auction season.
Check out the collection rate before relying on the clearance rate.
Like any statistic, the accuracy of the metric is only as reliable as the sample of data it is taken from. CoreLogic consistently collects between 85% and 95% of all auction results each week. Over the year to date CoreLogic has collected 89% of all auction results. Reporting auction results is at the discretion of individual real estate agents who we thank for their cooperation in providing the results of their auctions each week.