Auctions are back for 2024 – but are properties actually selling?
Clearance rates have skyrocketed to a four-month high across capital city markets, sparking a positive swing in sentiment and setting the stage for a very interesting autumn buying and selling season, new data has revealed.
The Domain Auction Report Card – February 2024 showed across the combined capitals, 63.7 per cent of properties cleared under the hammer as buyers flocked to one of the nation’s favourite spectator sports to try their hand at securing a home.
The report highlighted a notable rise in auction listings in February, following a dampened wrap on clearance rates at the end of 2023. The uptick in properties going to auction gave buyers more choice and sellers more confidence as they put their properties to the test.
“Now clearance rates are sitting higher than they were at the start of 2023 and that’s a big difference because, at the beginning of 2023, we were right in the midst of a rising cash rate but what this showcases is that there’s been a change in sentiment in both sellers and buyers – in a positive way,” says Domain chief of research and economics Dr Nicola Powell.
“The cash rate is expected to fall two times this year so I do think that is helping to feed greater positivity amongst buyers and sellers, particularly for buyers. Those that understand market dynamics will have that knowledge that once we do see the cash rate being cut, it will likely spark greater demand and therefore greater levels of competition.”
Powell says the high volume of auctions in February is typical, as sellers tend to enter the market following the holiday period.
“What you tend to find is clearance rates start the calendar year higher than the previous year closed,” she says. “Buyers come to market early in the calendar year focused on purchasing because they missed out in the previous calendar year.”
Of the capital markets, Sydney reigned supreme as the best-performing capital city with a clearance rate of 69.4 per cent in February – a seven-month high. This is the first time the city has managed to maintain a clearance rate above 65 per cent in three months.
“February was when things really started to build momentum again in the market,” says James Walters of PRDnationwide Harvey Oatley. “We’ve found that we’re getting good numbers through many properties and several sellers going to market but I do still think there is a shortage of homes.”
Walters recently sold 3/2A Oatley Avenue, Oatley, under the hammer for $955,000 in what he described as a “perfect storm” sale.
“Normally, a unit auction would have two registered bidders but this particular unit was a ground-floor apartment so it suited young couples, downsizers and those that are looking for affordable housing,” Walters says. “We had seven registered bidders and it went well over the reserve. That was probably a standout sale for us.”
Oatley, in the Inner South West, was the strongest performing region in Sydney with a clearance rate of 73.9 per cent.
Adelaide lost its title as the best-performing auction city, but it was not far off Sydney with a clearance rate of 63.8 per cent.
Despite the annual dip, Andrew Downing of Ray White Adelaide City says the city’s auction market has been “very strong” thanks to the lack of stock and high demand.
“There hasn’t been a great deal of supply in Adelaide and for the first time ever, Adelaide is somewhat seen as a destination for everything now, so we’re finding that a lot of people urgently want to move over here and we’re just trying to help facilitate that,” he says.
“Adelaide’s been outperforming most markets recently, so since we have people moving here, a lot of sellers are holding off from selling because they’re struggling to find something to buy … people are selling and then buying in the same market, so it’s a bit of a struggle.”
In Melbourne, clearance rates sat at 62.3 per cent – the first time it has moved above 60 per cent since October 2023.
In Brisbane, 46.4 per cent of properties were cleared in February – this was the weakest outcome of the capital cities. However, Brisbane is a less auction-centric market; therefore, Powell says variations are expected.
In Canberra, the clearance rate was at 50.3 per cent. Canberra recorded the most significant annual drop of all capitals (7.1 percentage points), with its clearance rate remaining weak compared to its historical performance.
Anthony Weston of Hive Property says the capital has returned to pre-pandemic clearance rates.
“Canberra became an auction market in the last few years and at that time, during the pandemic, we were pushing 90 per cent clearances all the time but these last few weekends, Canberra’s recorded around that 50 per cent to 60 per cent mark and that seems more consistent to what it was like pre-pandemic boom,” he says.
“Everything changed during COVID but I think it’s a more balanced market now in Canberra.”
While it is too early to determine how the remainder of the auction year will fare, the autumn selling season will be telling, Powell adds.
“The end of March and April, we have a number of public holidays from Easter to Anzac Day, and then we also have school holidays as well. You’ve got various things that impact the activity side of the housing market,” she says.
“So, over the next few weeks, we’ll see higher levels of activity, particularly before Easter, so this new season will be the next big test of the property market.”
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