Are property auctions a thing of the past?
With auction clearance rates around Australia at a low point, I know some commentators are suggesting it’s not worth taking your property to auction any more
I don’t agree.
On the weekend we purchased a great villa unit at auction for a client – a true investment grade property which was hotly contested by 2 owner occupiers and 2 investors.
“A grade homes” and investment grade properties are still holding their values and selling well at auction.
So some properties are still the type that I would auction if I were selling my property.
However according to CoreLogic’s Quarterly Auction Market Review, fewer properties are being auctioned.
Over the 3 months to September 2018, 20,653 homes were taken to auction across the combined capital cities.
This is down from 25,824 over the June quarter and much lower than the September 2017 quarter when 27,953 auctions were held, although noting the September 2017 quarter was made up of 14 weekends compared to 13 this year.
Prior to this quarter, the lowest volume of auctions was recorded over the 3 months to March 2017 when 19,241 homes went under the hammer.
The number of homes taken to auction each week over the September 2018 quarter has been lower than the corresponding week in 2017 highlighting a weakening in vendor confidence driven by the softer housing market conditions and consistently lower clearance rates.
The combined capital city clearance rate fell to 53.6 per cent over the quarter, down -4.2 per cent from the previous quarter; making it the lowest quarterly result since December 2012 (50.9 per cent).
The highest clearance rate this quarter was recorded over the week ending 22nd July (57.0 per cent across 1,257 auctions), while the lowest clearance rate was recorded over the week ending 30th September (45.8 per cent across 895 auctions).
Looking at the individual capital cities, Perth saw the largest increase in clearance rates over the quarter, up 5.7 per cent, followed by Adelaide with a modest 0.1 per cent improvement.
All other capitals saw the clearance rate drop with Tasmania recording the largest quarterly fall, down -7.1 per cent, although given the low volumes in Tasmania the clearance rate can be volatile.
Canberra fell -6.6 per cent, followed by Sydney (-5.1 per cent) and Melbourne (-4.6 per cent), while Brisbane showed little change over the quarter (-0.1 per cent).
Capital city key statistics
Melbourne auction result summary.
The lowest clearance rate was recorded across the Mornington Peninsula where just 46.6 per cent of the 240 auctions held were successful, making it the only region to fall below the 50 per cent mark for Melbourne over the 3 months to September 2018.
You may want to see more detailed Melbourne auction statistics here: CoreLogic Melbourne Quarterly Auction Market Review
Sydney auction result summary.
Clearance rates fell below 50 per cent across 10 of the 15 Sydney sub-regions over the September quarter.
The largest quarterly fall was seen across Baulkham Hills and Hawkesbury (-15 per cent), followed by Ryde (-12 per cent).
The strongest clearance rate was recorded across the Eastern Suburbs where 60.8 per cent of the 981 auctions were successful, while the lowest clearance rate was recorded at just 33.8 per cent across 246 auctions.
Auction volumes were lower across all 15 sub-regions when compared to both the previous quarter and the same time last year, with the busiest sub-region being North Sydney and Hornsby (1,215 auctions), and the quietest sub-region being Outer West and Blue Mountains (77 auctions).
When looking at the September 2017 quarter, clearance rates were stronger across all 15 regions with 4 sub-regions falling by at least 20 per cent year-on year (Inner South West, Central Coast, Baulkham Hills and Hawkesbury and Blacktown).
Overall Sydney is tracking lower year-on-year for both auction volumes and clearance rates with the September quarter recording a success rate of 50.9 per cent across 7,497 auctions, down from 66.8 per cent across 10,575 auctions over the same quarter last year.
You may want to see more detailed Sydney auction statistics here: CoreLogic Sydney Quarterly Auction Market Review
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