Clearance rate and median auction price hit record high in ACT: Domain data

There’s been a buzz in the air surrounding Canberra’s auction market, with the capital reaching a record high clearance rate of 80 per cent and a peak median auction price for houses at $882,500 for the month of September, new data shows.

According to Domain data, the clearance rate in September was up 16.6 percentage points from the same time last year, with 187 houses and 22 units scheduled to go under the hammer.

“The auction market continues to provide these strong results, and the fact that it’s the highest auction clearance rate in more than two decades really illustrates that,” said Domain senior research analyst Dr Nicola Powell.

“Overall, what we’re seeing is a lack of choice, which I think has been a key driver in supporting a strong performance in the auction market.”

Earlier this year in February, before COVID-19-related restrictions were in place, Canberra recorded a clearance rate of 79 per cent.

Since then, rates have fluctuated in the capital amid the pandemic, including a drop to 45 per cent in April, followed by a climb to 75.5 per cent in July. 

Mark Larmer of Independent Inner North & City described the current market as “a feeding frenzy”.

“We’ve been having 20 to 30 auctions throughout a single week and that’s just not enough because there are significantly more than 20 buyers every week,” he said.

“So the lower stock is gravitating all the buyers to the same property, particularly when there are only one or two properties being sold in one suburb.”

Properties scheduled to go to auction tend to be transacted within an intense three-to-four-week campaign, but due to the high buyer demand Mr Larmer decided to conduct a number of short auction campaigns, including a three-bedroom home in Scullin on Thursday after only two weeks on the market.

He has also noticed a trend of increased pre-auction offers from buyers wanting to get their hands on the keys sooner rather than later.

“If a seller has received a premium pre-auction offer for their home very early on and held off for the entirety of the campaign, say 14 or 20 days, that’s a long time for the buyer and the seller [to wait] because that same buyer may then make an offer for another house,” he said.

“As agents, we can run substantially shorter campaigns and still be doing the right thing by all parties involved. With the high demand from buyers, they aren’t hesitating to express their interest, put in a pre-auction offer or go through a bidding war on the day.”

When looking at Canberra districts, all of the regions’ clearance rates were up in September from the same time last year, with Belconnen taking the lead with a clearance rate of 88 per cent.

This was followed by the Inner North at 85 per cent, Tuggeranong at 83 per cent and Weston Creek at 80 per cent.

“Some of these areas that have strong clearance rates are mostly affordable regions. These are family heartland areas that are also quite affordable for a first-home buyer,” Dr Powell said.

“Belconnen, Tuggeranong and Weston Creek, for instance, offer affordable housing for first-home buyers and buyer demand is clearly there because it’s producing strong clearance rates.”

Dario Beltrami of Blackshaw Manuka said he had a pool of buyers waiting for any property to come on the market and, with a shortage of stock, property was a “hotly contested commodity”.

“It is true that houses have been selling at auction, the market is hot and properties are being snapped up,” he said.

“Buyers want to secure a property now. They’d been to three to four auctions, have missed out and want to put in as many pre-auction offers as they can before it’s taken away.”