Over the 3 months to March 2020, the clearance rate across the combined capital cities came in at 62.5 per cent across 18,902 auctions, down from 70.3 per cent across 26,923 auctions over the previous quarter. However, this was higher than the March quarter last year when 49.9 per cent of 14,647 auctions were successful.
It is clear that the uncertainties around COVID-19, along with tightened restrictions and the banning of onsite and in-room auctions, has seen clearance rates take a hit over the past month, with the final week of March seeing the clearance rate fall to just 37.3 per cent across the combined capitals. Looking back to February, weekly clearance rates were in the low 70 per cent range for the last 3 weeks of the month, before revising lower on a weekly basis for the remainder of the quarter.
Looking forward, the coming months are likely to see substantially fewer auctions than normal. Some vendors will choose to convert their listing to a private treaty method, while others will likely pull their property from the market all together until confidence and selling conditions improve. The auctions that proceed will likely utilise digital platforms such as Gavl or AuctionNow as well as proprietary platforms from the major real estate groups - so watch this space.
Eliza Owen, Head of Research Australia comments on the latest results:
“There are various pressures that have led to a decline in the March quarter auction result. The banning of onsite auctions and open homes have physically prevented some auctions from going ahead or prompted vendors to pull out of the market. Withdrawal rates surged from an average of around 6% to 50.2% in the week ending 29th of March.”
“More broadly, the ANZ-Roy Morgan consumer sentiment index plummeted 9.8% over the same week, signifying that rising job losses and uncertainty has dampened property demand.”
Eliza said, “Before the onset of the coronavirus, affordability constraints had already started to slow momentum in the property market, and this is reaffirmed by a decline in the combined capital city dwelling growth to 0.7% in the month.”
Eliza concludes, “Looking ahead, the next few months will present an unprecedented challenge to the auction market and the housing market more broadly. However, once the virus is contained, property is looking increasingly better-placed for a recovery because of the high levels of monetary and fiscal stimulus available.”
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