Canberra auction report card: July 2020

Canberra’s auction clearance rate was 75.5 per cent in July, hitting just below February’s pre-COVID-19 pandemic performance of 78.6 per cent.

Clearance rates are 30.5 percentage points above the April low, when the full COVID-19-related lockdown impact was being felt. They continue to improve, up 5.3 percentage points from June and 22.1 percentage points higher than July last year.

Clearances have rebounded on a smaller pool of auctions – 142 homes were scheduled for auction over July, down 16.5 per cent compared to last year.

Auction volumes have been persistently weak since the coronavirus pandemic lockdown and restrictions were introduced. It was the lowest number of auctions over the month of July since 2013 but while volumes were low, they had improved 36.5 per cent from June, showing vendor sentiment is improving.

Vendor confidence has improved from the lockdown lull. As auction volumes track higher over the month, it is not necessarily an indication that the spring selling season is early, but it is more likely a result of delayed property decisions flowing from April and May.

Withdrawn auctions have returned to historically normal levels. In July, 6.1 per cent of sellers withdrew from auction – which is on par with the decade average, and a significant improvement from the 32.5 per cent bounce in April.

The proportion of auctions withdrawn tends to decline in a strengthening market and the opposite during periods of softening.

It is an early sign of market weakness, although it may not mean significant price falls will ensue given the significant withdrawn lift in April was a direct response to a government policy change.

This was confirmed in the latest House Price Report, which found Canberra to be one of the cities to continue to record house price growth over the June quarter.

Sellers are finding buyers before auction

Canberra has a rising cohort of sellers who are accepting an offer before the auction day.

Based on the decade average, one in 10 homes finds a buyer before the auction hammer falls. This trend has risen in recent months, and is now at 17.7 per cent. The proportion of scheduled auctions selling prior has been elevated since February.

The rising trend of selling prior to auction is something that unites the three major auction-centric markets; Sydney, Melbourne and Canberra. For some micro-markets it could signal the buyer pool is not deep enough for a competitive auction, or vendors are being attracted to a quick sale given the changing health and economic outlook, or it could be a new hybrid method of selling hinging on a strong auction marketing campaign.

Auction prices track higher

House auction prices are at record levels. Due to the low volume of auctions, type and quality of stock going under the hammer, monthly auction prices can fluctuate wildly. Over the three months to July auction prices hit $829,167.

Canberra region performance