Canberra auction report card: October 2020

Canberra’s auction clearance rate continues to provide strong results with the city recording its most robust October performance on record.

The clearance rate hit 77.5 per cent in October, 11.9 percentage points above October last year and 2.9 percentage points below September’s 80.4 per cent – although September provided the second-highest monthly clearance rate on record.

Clearance rates have surged past 70 per cent for five consecutive months, illustrating the strong underlying demand and competition for homes on the marketplace.

Clearances have rebounded on a larger number of auctions – 292 homes were scheduled for auction over October, up 20.2 per cent compared to last year and a marginal 0.1 per cent above the past five-year October average. This is the largest number of homes going under the hammer since February.

Auction volumes were persistently weak following the coronavirus-related lockdown and the introduction of restrictions but they have been tracking steadily higher since May. Vendor confidence has clearly improved from the lockdown lull.

Vendors remain confident in auction campaigns

In October, 6.3 per cent of sellers withdrew from auction, which is marginally higher than the decade average, and a significant improvement from the COVID-19-induced April bounce. Sentiment has returned with few vendors pulling homes from auction.

It is important to note that withdrawn auctions are included within the unsold properties when calculating the clearance rate.

Almost one-quarter of homes are selling before the scheduled auction day, above the decade average. Note, a rising proportion of homes selling prior to auction can illustrate a market on the move.

As competition to secure a home increases, buyers are more likely to place a robust offer prior to auction day to avoid driving prices even higher at a competitive auction. On the other hand, vendors can be more open to accepting an offer if they are concerned the auction isn’t going to be a competitive one.

Buyers are keen to secure homes before auction given prices are rising and the lack of new supply.

Auction price push upwards

Due to the changing volume of auctions, type and quality of stock going under the hammer, monthly auction prices can fluctuate wildly. The median auction price was $862,500 based on the houses auctioned over October, or $872,500 based on the rolling three-month average.

Either way, median house auction prices have risen by double-digits compared to last year.

Canberra region performance