Australia's auction market is showing early signs of life, with clearance rates climbing across both major auction data providers as buyers look ahead to the Reserve Bank's Tuesday decision.
Cotality's preliminary combined capital city clearance rate rose to an eleven-week high of 55.1% this week, a marked recovery from the 47.4% low recorded in late June.
The improvement was driven largely by fewer vendors pulling properties from the market before auction day, with the withdrawal rate falling to 16.2% — its lowest level since late April — as fewer sellers opt for the auction format altogether; auctions made up only around 26% of new capital city listings in early August, down from roughly 40% in late March.
Melbourne led auction volumes with 654 homes taken to market, its clearance rate breaking through 60% for the first time since late May. Sydney's preliminary clearance rate jumped to 57.0%, a four-week high, despite auction volumes remaining well down on last year. Brisbane and Adelaide told a softer story, with clearance rates of 38.1% and 46.8% respectively, the latter a five-week low.
A separate measure from Ray White told a similar story of improving competition nationally, even as the city-level picture stayed mixed.
The group's national clearance rate pushed above 53% for the first time since mid-May, with average active bidders per auction rising to 2.9.
Ray White CEO, performance and value, Thomas McGlynn said the improvement in buyer competition was the more telling signal.
"The national clearance has pushed back above 53%, but what stands out more to me is the improvement in competition, with active bidders rising to 2.9. We shouldn't confuse this with a market suddenly running hot, but it does suggest buyers are becoming more prepared to compete when the right property is put in front of them," McGlynn said.
Both data sets point to a market cautiously testing renewed confidence just as the RBA prepares to hand down its next cash rate decision and quarterly Statement on Monetary Policy on Tuesday 11 August, a call that follows the closely watched June quarter CPI print.
A hold at 4.35% is broadly expected, though the tone Governor Michele Bullock strikes on the path ahead is likely to matter as much to buyer and borrower sentiment as the decision itself.
McGlynn said the market's improvement, while modest, could carry through if rates stay stable.
"The market doesn't need to be booming to be getting better, and this week feels like a meaningful step in the right direction," he said. "There is still plenty of caution in the market, but caution and confidence can exist at the same time. We're starting to see a little more confidence from buyers, and that is usually where momentum begins."
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