Fewer homes went to auction in Australia’s capital cities and clearance rates softened further as values fell, interest rates rose and buyers’ enthusiasm waned during the September quarter.
CoreLogic’s Quarterly Auction Market Review shows 23,087 properties across the capitals went under the hammer in the September quarter, the lowest figure since the March quarter in 2021.
Numbers were down compared to the three months to June when 31,439 auctions were held, which followed the busiest March quarter on record when 23,748 homes went under the hammer.
CoreLogic research director Tim Lawless said lower auction volumes were indicative of weaker consumer sentiment and fewer overall listings in the market nationally.
“Lower auction volumes are another indicator of the rapid change in market conditions as sellers also adjust to increasing interest rates and fewer buyers,” Lawless said.
“We’re also seeing similar trends across new supply of ‘for sale’ stock in general.
“Seasonally, spring is usually the peak time for sellers to list their property, but this hasn’t materialised, with the majority of cities and rural areas yet to see the normal seasonal upswing in freshly listed properties hitting the market.”
Auction clearance rates were also weaker with 56.4 per cent of reported auctions successfully sold under the hammer in the three months to September 2022, the lowest quarterly clearance rate since June 2020 (47.9 per cent) when the initial phase of Covid-related lockdowns were implemented.
The results were down 15.2 percentage points from the same period last year (71.7 per cent) and on the June quarter, when 60.8 per cent of reported auctions were successful.
“Clearances rates have been falling each quarter just as the rate of growth in property values has slowed,” Lawless said.
“The combined capital city clearance rate hit a record peak of 80.0 per cent in March 2021 and has gradually declined since.
“However, the monthly trend in clearance rates has shown a consistent rise in auction clearance rates, with the weighted average capital city clearance rate firming around 60 per cent each week in September.
“It will be interesting to see whether clearance rates continue to hold as we move through what is traditionally the busiest quarter of the year.”
Of the capital cities, Adelaide recorded the highest clearance rate this quarter with 67.7 per cent, followed by Tasmania (58.8 per cent), Melbourne (58.5 per cent) and Canberra (57.5 per cent).
Sydney recorded a clearance rate of 55.0 per cent over the quarter, while Brisbane (43.9 per cen) and Perth 38.8 per cent both came in under 50.0 per cent.
In terms of auction activity, Melbourne was the busiest auction market, with 9107 homes going under the hammer, followed by Sydney (8776) and Brisbane (1970).
There were 1810 auctions in Adelaide, 1228 in Canberra, 179 in Perth and 17 auctions held in Tasmania over the September quarter.
“After the volume of auctions was consistently higher than a year ago through the first four months of the year, every capital city has seen a marked fall in auction activity in the September quarter,” Lawless said.
“With auction clearance rates generally tracking at below average levels, it’s likely more vendors are opting to sell via private treaty rather than auction as fewer competitive bidders could make the auction process less effective at achieving the best possible price.”
