The last quarter of 2020 showed the continued recovery of auction markets across capital cities from the COVID-19 outbreak, establishing a strong momentum for this year, according to CoreLogic’s latest market report.
The December quarter was the busiest last year for auctions, with volumes increasing by 44% to 20,489. The quarter was also the best-performing last year in terms of clearance rate, which hit 69.4%.
The quarter also witnessed a low proportion of withdrawn auctions at 8.9%. There was also a lower share of homes sold prior to auction at 36.8%.
The significant improvement in auction activity can be attributed to Melbourne, which underwent an extended period of lockdown last year. During the city's stage four lockdown, vendor activity became pent up, leading to a delayed surge, said Eliza Owen, head of research at CoreLogic.
"As restrictions eased, we saw new listings soar across Melbourne with people looking to sell, and last year the seasonal drop off in auction activity happened about a week later than we would typically expect, as agents tried to keep up with vendor demand," she said.
However, it is important to note that the performance of auction markets during the quarter was significantly weaker than last year. Still, Owen said the auction markets have started to build momentum, which would likely continue this year.
"We would expect auction results to continue on a strong footing into 2021 as volumes ramp up, providing there’s no major resurgence of COVID-19 in the community which would serve to dampen the momentum building late last year,” Owen said.