Auction clearance rates surge over July as markets heat up

Home auction market activity in most capitals strengthened over July with higher clearance rates reflecting strong competition for property fuelled by generally low listing volumes.

Sydney

Auction clearance rates in the Sydney market increased sharply over the month to 72.6 percent compared to the 69.2 percent reported over June. This was the highest monthly clearance rate recorded by the local market this year with buyer activity clearly on the rise over winter.

Sydney’s higher clearance rates were influenced by low numbers of auction listings with average weekend listings falling from 517 to just 341 over the month and well behind the 613 averaged over July last year. Auction listings in Sydney are down by 3403 over the first seven months of this year compared to the same period last year – a decline of 18.9 percent.

Melbourne

The Melbourne auction market also reported a sharp increase in auction activity over July with clearance rates rising from 67.7 percent over June to 71.7 percent.

Average weekend auction volumes were also down over the month falling from 723 to 457 and also well below the 585 averaged over July last year. Melbourne’s auction numbers this year so far at 18,505 however have fallen by just 1.3 percent or 239 fewer compared to the same period last year.

Brisbane

In contrast to the Sydney and Melbourne markets, home auction activity in Brisbane weakened over July with clearance rates falling from 45.1 percent to 44.2 percent and well below the 54.5 percent recorded over July last year.

Auction volumes were also well down in Brisbane over the month with average weekend listings falling from 105 to 77. Auction numbers in Brisbane however have increased by 6.2 percent to 3,708 over the first seven months of this year compared to the same period last year.

Adelaide

The Adelaide auction market also declined over July with clearance rates falling sharply from 66.1 percent to 56.9 percent – similar to the 57 percent recorded over July last year

In line with other capitals, Adelaide auction numbers were also down over July falling from the weekend average of 61 recorded over June to 52, but higher than the 46 average over July last year. Adelaide auction volumes so far this year have increased by 9.5 percent to 2,246 compared to the same period last year.

Canberra

Auction clearance rates in the Canberra market increased over July from 62.7 percent to 67.4 percent – the equal highest monthly result for the year and similar to the 68.7 percent recorded over July last year.

Similar to other capitals mid-winter auction numbers were also down in Canberra falling from a weekend average of 44 over June to 30 – but similar to the 31 average over July last year. Overall auction volumes in Canberra are 7.6 percent higher this year so far compared to the same period last year – an increase of 107 auctions

Low rates to fuel auction market momentum

Mid-winter auction market have clearly strengthened in most capitals with clearance rates in Sydney, Melbourne and Canberra at or near the highest recorded so far this year.

Although median auction prices fell over July in all capitals, this clearly reflected the usual declines influenced by seasonal impacts from a lower proportion of higher –priced homes offered for sale over the month.

Low and falling mortgage rates and increased activity by investors are continuing to provide most auction markets with momentum with the prospect of further rate cuts proving a solid foundation for continued robust buyer activity into the spring market.

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson and connect at LinkedIn