Canberra's auction performance drops to five-year low

Canberra’s auction clearance rate dropped to five–year low in November, according to preliminary Domain Group data.

From 473 reported auctions, only 45 per cent sold under the hammer – down from a 55 per cent clearance rate in October.

“This is the lowest monthly result since a 40 per cent output in December 2013, and the lowest outcome for the month of November since 2011,” said Domain senior research analyst Dr Nicola Powell.

This comes after Canberra’s clearance rate dropped below 40 per cent on the weekend – with only 39 per cent of homes selling under the hammer on Saturday.

Dr Powell said there was a range of factors contributing to the decline but post-auction, homes were selling relatively quickly.  

“Greater choice of homes on the market and a tighter lending environment are creating tougher selling conditions for vendors,” she said.

“Proportionately fewer homes are selling under the hammer, but post-auction negotiations are becoming more common practice. Canberra is currently experiencing a prominent rise in the number of homes selling within the weeks immediately after auction day.”

Tuggeranong recorded the lowest clearance rate at 31 per cent.

Weston Creek had the highest number of auction sales with 57 per cent of properties selling under the hammer over the month.

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“The market is adjusting, it’s come off a peak. We have come out of the longest period of capital growth in 20 to 30 years and people haven’t adjusted to it,” said Ray White Canberra auctioneer Peter Walker.

Mr Walker said the lending environment did not favour unconditional contracts and that’s contributing to the decline.

“People who could buy two months ago can’t buy now until they sell their home,” he said.

“While the numbers [of buyers] have dropped, it’s really the buyers that can offer unconditional contracts.”

November is typically the biggest month for auctions in Canberra, and this year proved no different with 473 scheduled auctions – the highest monthly volume of 2018.

Year-on-year, the total sales supply for both houses and units was up. Last month a total of 3155 properties were on the market, compared to 2663 in November 2017.

Unsurprisingly, Molonglo Valley had the greatest year-on-year jump in the volume of houses on the market at 49.3 per cent, followed by the Inner North at 41.7 per cent.

In Weston Creek unit supply jumped 66.7 per cent but it was down in Belconnen, Queanbeyan and Tuggeranong.

Rental supply continued to fall over November, down 9.1 per cent for houses and 14.3 per cent for units.