‘Sellers’s expectations are too high’: Canberra’s auction market weakens

Canberra’s auction market is showing signs of weakness with weekly auction clearance results sitting well below cities like Sydney, Melbourne, Adelaide and Brisbane.

The capital used to be a popular auction city, likened to markets like Sydney and Melbourne. But in recent weeks, it appears Canberrans’ love for the spectator sport has changed.

According to preliminary auction results by Domain on Saturday, Canberra recorded a clearance rate of 52 per cent – the lowest of all recorded capital cities – from 23 reported results, of which just 12 sold, four had withdrawn, and seven passed in.

By comparison, Sydney had a 70 per cent clearance rate, Melbourne recorded a 71 per cent clearance rate, Adelaide 74 per cent and Brisbane 75 per cent.

The weekend prior, Canberra sat at just 47 per cent from 83 reported results, of which 39 sold, three had withdrawn and 41 passed in. Meanwhile, Sydney recorded a clearance rate of 69 per cent, Melbourne 67 per cent, Adelaide 68 per cent and Brisbane 50 per cent.

“What this showcases is that the property market is weaker in Canberra compared to other cities,” said Domain chief of research and economics Dr Nicola Powell.

“Canberra is now one of the weakest capital cities apart from Brisbane, which is unusual because Canberra is an auction-centric market … but auction volumes have been very weak as well. 

“It shows that sellers are just not going to auction … they’re delaying their decisions to sell, likely due to the overall property dynamics that we’re seeing.”

In March, the number of properties going under the hammer had been lower than usual, down 26.7 per cent year-on-year.

Zac Morris of My Morris said while clearance rates have softened, sellers were still open to this selling method.

“I still believe a well-run auction campaign is the best method to achieve a timely result and a great price; however, it is less clear-cut than when the market was booming during COVID,” he said.

“Ultimately, though, you can achieve a great result with either sale method as long as the marketing and pricing are appropriate.”

The property high Canberra went through with skyrocketing prices in the past few years was something many sellers were holding out hope for, Jonny Warren of Jonny Warren Properties said.

“The problem that we’re seeing is that sellers’ expectations are too high still. So, they haven’t adjusted to the market prices of where the value is and what buyers are willing to pay for homes now,” he said.

“I always tell sellers that [the market] is like a lottery at the moment, some will sell and you hit the jackpot and then others don’t.”

And while auctions will still be a selling method moving forward, Warren said many properties will sell prior to auction as more buyers come out of the woodwork amid the RBA’s cash rate pause.

“We’ve seen a big difference in market confidence since that announcement,” Warren said.

Morris echoed Warren’s statements noting that there were also buyers “trying to avoid buying at auction”.

“It’s been a tough four months … there were a lot of people struggling with the rate hikes and it was pleasing to see that with a rate freeze, there’s a lot more confidence in the market but it’s not going to last forever,” Warren added.

“[Buyers and sellers will] embrace while it’s paused but as soon as [the RBA] decides to increase that rate, we could see some distressed selling.”