Clearance rates drop after half of Melbourne auction withdraws

by Micah Avry Guiao24 Aug 2021

Capital cities across Australia saw 1,977 homes taken to auction this week — up from last week’s 1,822 and last year’s 1,064, according to the latest report from CoreLogic.

However, this week also marked the lowest preliminary clearance rate since July 2020. Of the 1,525 results collected so far, only 63.3% were successful, in comparison to last week’s 72.3% and last year’s 60%.

Melbourne’s continued lockdown brought 1,179 scheduled auctions this week down to 1,067, with 9.5% postponed to a later date. Regardless, this was still sizeable compared to last week’s 884.

Of the 792 results collected so far, 49.9% were withdrawn, dragging the preliminary clearance rate down to 48.6%. In addition, 69.4% of the 385 purchased properties were sold prior to auction—the highest “sold prior” rate since the last week of June 2020.

Meanwhile, Sydney reported 529 properties taken to auction, down from the previous week’s 551 and last year’s 615. Of the 454 results collected so far, 81.7% were successful, while 13.7% withdrew from the auction.

“Clearly, we are seeing a remarkably different outcome in auction results across Australia’s two largest auction markets, which can be explained by the fact that properties can still be physically inspected in Sydney (although a private inspection is limited to one person at a time), but not in Melbourne. The divergence in the auction clearance rate tells the story about how important it is for prospective buyers to be able to physically inspect a property in order to make such a high commitment decision as buying a home,” CoreLogic said.

Among smaller markets, Adelaide was the best-performing capital city, with a preliminary clearance rate of 87.1%, while Canberra followed at 78.9% and Brisbane at 71.9%.

The table below shows the preliminary performance of each auction market.