Almost two thirds of all properties put to auction sold on Saturday.
There were still a volume of properties sold before the scheduled auction time, suggestive of some hesitancy on the part of vendors thus seeking more certainty over getting sales done in the current market.
Our experience on the ground and speaking to local agents is that vendors are selling for lifestyle reasons, rather than for financial reasons.
In other words they’re not panicking about the state of the market but choosing to move into a bigger or a smaller home, or move to a school catchment area, or they want a bigger backyard rather live in a small space recognising that life is going to be different moving forward. Some want room for a home gym or a Zoom Room.
At the same time buyers are being more selective, they’re not in a hurry and there is a flight to quality, especially since there are now more properties being put to sale by auction than there were a few weeks ago.
Well located A Grade homes and investment grade properties are attracting strong competition, but buyers since being very selective (and so they should be, secondary properties are not selling unless there is a significant discount.
This weekend Sydney delivered a solid preliminary auction clearance rates of 65.9%, considerably higher than last week’s final clearance rate (59.1).
Considering the increased COVID-19 scare over the last weeks, Melbourne delivered a solid preliminary auction clearance rates of 62.2%
There were fewer properties being put to sale by auction this weekend (940)than there were a last week because of the school holidays (1,150 capital city auctions were scheduled last weekend), but significantly more than the same weekend of last year (786 auctions.)
In fact, Sydney’s scheduled auctions were significantly more than last year (470 compared to 288), as was the case in Melbourne – 373 this year compared with 361 last year.
The preliminary auction clearance rates are reported below, however in this time of market flux the exact figures are meaningless, and more important is the market trends.
It’s now been a few weeks since the ban on on-site auctions and inspections has been lifted, and more vendors are placing their properties for sale by auction and we’ll continue to see auction volumes slowly increasing week by week.
We’ll then have a better indication of the trends, however we’ll have to wait a few more months to see the real impact of the lockdowns, unemployment, lack of immigration and business closures on our property markets.
Here are the preliminary auction clearance rates as reported by Domain
As always these will be lower by mid week when all the auction results not yet reported will be taken into account
Melbourne real estate auction results
The preliminary auction clearance rate for Melbourne as reported by Domain was 62.2% with 373properties put to auction, almost 20% more than the 527 properties put to auction last weekend (56.6% adjusted clearance rate) and much the same as the 373 properties listed for auction previous weekend (53.8% adjusted clearance rate)
But remember before Covid-19 Melbourne would have over 1,000 properties auctioned each weekend.
So far only 235 results have been reported and 40 properties were withdrawn from sale.
The unreported rate means the final clearance rate is likely to drop to around 55%.
Realestate.com.au reported that there were also 1003 private sales in Melbourne this week – more than the 919 sold last week and the 951 sold the week before.
A year ago in 2019 the Melbourne auction clearance rate was 67.3% and 361 properties were listed for sale by auction as the market was picking up after the Federal Election held in May.
Dr. Andrew Wilson reports that Melbourne’s Inner City region recorded the highest regional auction clearance rate at the weekend at 74.8%, reflecting particularly strong results from unit auctions
School holidays tend to moderate auction activity in higher-priced, inner-suburban areas, however the release this week of another 10,000 national places for the First Home Buyer
Deposit Scheme may have boosted sales activity for lower-priced units, particularly in popular inner-city suburbs.
Melbourne’s median prices for houses reported sold at auction at the weekend of $822,500 was 0.2% higher than recorded over the same weekend last year. However, the median auction price for units of $695,000 was up strongly by 10.1% over the year.
Sydney real estate auction results
The preliminary auction clearance rate for Sydney as reported by Domain was a solid 64.4% with 529 properties put to auction, considerably more than the 529 (59.1% clearance rate) and the 440 properties listed for auction weekend before (59.3% adjusted clearance rate.)
But remember before Covid-19 Sydney would easily have had double that number of properties auctioned each weekend.
So far only 310 results have been reported and a reasonably high number of properties (59) were withdrawn from sale.
The unreported rate means the final clearance rate is likely to drop to the mid to low 60%’s – a little higher than last week’s results.
According to Corelogic, Sydney houses were more likely to sell at auction than units last weekend – we’ll have to wait until Monday to see their breakdown for this weekend.
Realestate.com.au reported that there were also 1371 private sales in Sydney this week, much the same as the 1300 last week and the 1360 properties sold by private treaty the week before.
A year ago in 2019 the Sydney auction clearance rate was 68.1% and 288 properties were listed for sale by auction.
DR Andrew Wilson reports that Sydney’s Eastern Suburbs recorded the lowest regional clearance rate at the weekend at 66.6%, well behind the Central Coast, the North West and the West all at 84%.
School holidays tend to moderate auction activity in higher-priced, inner-suburban areas, however the release this week of another 10,000 national places for the First Home Buyer Deposit Scheme may have boosted sales activity in lower-priced, outer-suburban regions.
Sydney’s median price for houses reported sold at auction at the weekend of $1,250,000 was 1.9% higher than recorded over the same weekend last year. However, the median auction price for units of $695,000 was down by 18.4% over the year.
Comments by Dr. Andrew Wilson
Holiday Pause For Recovering Auction Markets But Clearance Rates Steady
The onset of school holidays has reduced auction numbers this weekend that however have been climbing steadily over recent weeks.
Clearance rates however remained steady overall and continue to provide most auction sellers with encouraging results.
Oliver said results had picked up a little, though clearance rates would still be weak once all results were tallied.
The weaker results were not a surprise given the impact COVID-19 and the restrictions in the state capital cities were having on the economy.
There could be more weakness ahead, particularly in Victoria as the lockdown intensifies,” Dr Oliver warned.
The impact of significantly reduced immigration numbers in Sydney and Melbourne, higher vacancy rates and higher unemployment were yet to fully hit the property market.”
Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on
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