Auction markets cool over May as sellers surge

Auction clearance rates eased over May as sellers rushed to take advantage of still overall strong local market conditions.

All capitals recorded a fall in clearance rates over the month with the exception of Canberra where results were significantly higher than the previous month.

Melbourne recorded the highest May clearance rate with 75.1 percent followed by Canberra 72.8 per cent, Sydney 71.6 per cent, Adelaide 63.0 per cent and Brisbane 46.5 per cent.

Although clearance rates were generally easier, auction volumes surged over May with the Melbourne and Sydney markets reporting record listings for the month.

Auction numbers were 29.5 per cent higher in Sydney over the first five months of this year compared to the same period last year with Canberra up 15.9 per cent, Melbourne up 14.3 per cent and Adelaide up 8.2 per cent. Auction volumes in Brisbane however are 12.9 per cent lower this year compared to last.

Despite the surge in listings, auction prices increased over May reflecting seasonal impacts to some degree following the significant holiday’s distractions and lower volumes of the previous month.

Median auction prices however have increased over the past year for all capitals with Melbourne the top performer up by 10.4 percent to $900,000, Sydney up 7.7 per cent to $1,320,000, Canberra up 7.6 per cent to $721,000, Brisbane up 2.5 per cent to $772,000 and Adelaide up 1.7 per cent to $595,000.

Capital city home auction markets enter the typically quieter winter months with conditions still generally favouring sellers. Auction volumes are however likely to continue at record monthly levels over June which will continue to put downward pressure on clearance rates in an increasingly distracted mid-year market.

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson join on LinkedIn and Facebook at MyHousingMarket.