According to preliminary results from CoreLogic, 2017 saw 2,323 properties go up for auction. Of these, 1,674 properties sold. Over the year, the average weekly clearance rate was 70.9%, suggesting strong appetite for commercial stock.
35% of cleared auction stock was industrial real estate, largely represented by warehouses. Victoria saw the most industrial sales, at 234. This was followed by New South Wales, which saw 213 industrial properties sold at auction over 2017.
The strong performance of industrial real estate reflects a sentiment experienced by commercial agents on the ground, which is that the high levels of residential acquisition and rezoning has partially crowded out industrial real estate in our major cities. The increased scarcity of industrial property in Sydney and Melbourne may have the impact of tightening vacancy and increasing yields, making industrial real estate increasingly attractive.
Interestingly, 34% of the commercial stock sold at auction over the year was retail. This counters the narrative of retail real estate struggling against the rise of online shopping. However, 62.5% of retail sales was in Victoria, where income growth and employment opportunity are among the highest of the states and territories. As a result, consumer sentiment has remained buoyant in the state.
While Victoria had the highest share of retail sales in auctions, the state also had the highest number of auction sales overall. Of the 2,323 commercial properties that went to auction in 2017, 45% of the auctions were held in Victoria, 32% in New South Wales, and 15.5% were in Queensland. This reflects the residential landscape, where auctions are a more common sale type in Victoria.