The new Auction Report for October 2023 from Domain shows that sellers are feeling more confident as we head into the busy spring selling season.
The number of properties being auctioned has reached its highest point in a year and a half in major cities (9,798) and in regional areas (1,443).
Melbourne saw its auctions hit the highest level in a year and a half, while Adelaide reached its highest level in eleven months, and Canberra hit an eight-month high.
According to Domain's data, in October, the clearance rate continued to trend downward across both the combined capitals and the combined regionals while remaining higher annually - a consistent trend since April, but the pace of improvement has slowed for the fourth consecutive month.
|Location||Clearance rate||Monthly change||Annual change||Auction volume||Sold at auction||Passed in||Sold prior||Withdrawn|
|Geographies are ABS GCCSA. Auction reporting rates are 93.8% in Sydney, 94.9% in Melbourne, 86.6% in Brisbane, 88.8% in Adelaide and 86.4% in Canberra.|
The capital cities broadly followed the downward trend, apart from Melbourne (64%).
Sydney’s clearance rate (66.3%) remains above 65%.
Brisbane’s clearance rates (44.7%) remain the weakest of the capital cities, but the pace of decline has slowed.
Adelaide (67.3%) continued its reign as the best-performing capital city in October but has fallen below 70%.
Canberra’s clearance rate (50.3%) decreased in October - the fourth month in a row of a decline.
Dr Nicola Powell, Domain’s Chief of Research and Economics said:
“The increasing auction volumes signal that vendor confidence has continued to climb as the spring selling season reaches its peak.
The lift in auction listings is driven by prices close to new records and improved property market conditions, motivating sellers to list.
However, the recent performance of clearance rates seems to indicate a more balanced market.
November is likely to see a bumper volume of auctions and be the final test for 2023 - helping to set the scene for 2024’s autumn selling season.
The higher auction listings have weighed on clearance rates, as choice eases buyer competition and dissipates the sense of urgency that was evident earlier in the year.
While it is the weakest result since March, it is the strongest run of clearance rates since November 2021.
Across the combined regionals, it is the weakest result this year but remains marginally stronger than most of 2022.
This aligns with the almost full recovery of Australia’s housing market.”
According to Domain's data, clearance rates across the combined capitals declined for the fourth consecutive month but remain high relative to 2022.
Annually, it is up by 6.5 percentage points, but the pace of improvement has dropped for the fourth month in a row (figure 1).
Likewise, the combined regional clearance rate fell for the fourth successive month but remains high compared to historical performance.
Annually up 1.1 percentage points, but the pace of improvement has declined for the fourth consecutive month.
Sydney has upheld a steady clearance rate above 65% all through 2023, marking the longest period since November 2021.
Although it experienced a slight drop for the second month in a row (down by 0.6%), it showed the most significant yearly increase among the capitals, rising by 8.4 percentage points.
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Melbourne's clearance rate went up while other major cities didn't follow this trend.
This rise marks the most robust performance since July 2021 and shows an increase of 5.5 percentage points over the year.
Brisbane's clearance rates continue to be the lowest among capital cities, dropping in October.
However, the rate of decline has eased.
It's the fourth consecutive month of decrease and has stayed below 50% for the second month in a row.
This is typical as Brisbane has fewer auctions, aligning with its usual performance history.
Adelaide was the top-performing capital city in October but dropped below the 70% mark.
Although its clearance rates are higher compared to last year by 4.0 percentage points, it experienced the biggest drop in a month and showed the weakest increase compared to other capitals over the year.
Canberra's clearance rate dropped in October, marking the fourth consecutive month of decline, a trend not seen since August 2022.
It remains the only capital city with a yearly decrease, down by 13.3 percentage points.
Domain's data show that auction volumes hit an 18-month high across the combined capitals and an 11-month high across the combined regionals.
Across the combined capitals, auction volumes increased over the month and year.
Across the combined regionals, auction volumes are up over the month but fell marginally over the year.
Meanwhile, auction volumes varied across the capital cities, falling in Sydney and Brisbane over the month.
In Melbourne, volumes hit an 18-month high, while in Adelaide, it’s the highest in 11 months and an eight-month high for Canberra.
Annually, Sydney is up by 25.9%, Melbourne by 22.6% and Canberra by 4.7%.
Conversely, Brisbane is down by 21.0% and Adelaide by 6.2%.
Domain's report highlighted that across the combined capitals, unit clearance rates are higher than houses (table 2).
|Clearance rate||Monthly change||Annual change||Clearance rate||Monthly change||Annual change|
|Perth, Darwin and Hobart are removed due to low auction volumes.|
The capital cities saw varying results, with Melbourne and Brisbane following this trend.
Canberra saw the biggest gap between property types, with the clearance rate for houses 15.7 percentage points higher than units.
As affordability issues persist, borrowing capacity is low, and the perceived value of units becomes more apparent, demand may shift toward units.
Apart from Melbourne, Brisbane units and Adelaide units, all capital cities saw a monthly decrease while all capitals experienced an increase annually apart from Canberra.