There were 2,303 homes taken to auction across the capital cities over the week ending 22 February, with a clearance rate of 54.1%.
However, while it is the first time this year that weekly auction volumes have risen above 2,000, the figure is down 30.5% year on year due to ongoing difficulties obtaining finance.
“We’re facing a market that is going to be challenged by the difficulty of obtaining mortgages,” said Kevin Brogan, auction market commentator at CoreLogic.
“There’s been evidence that the difficulty of obtaining finance has reduced the number of people who are able to purchase at auction. Even if they’re positioning themselves to purchase a property, they may not be able to participate in an auction.”
During the same week last year. 3,313 auctions were held with a 66.8% clearance rate.
Brogan, said, “Sydney and Melbourne being higher than they were in the last quarter of 2018 speaks to some resilience in the auction market. But although we’ve had the seasonal increase we expect as we move into March, the volume of auctions is much lower than last year.”
There were 1,144 auctions held in Melbourne this week showing a clearance rate of 53.1% as opposed to 1,606 auctions with a clearance rate of 70.6% in the same week last year. Sydney dipped to 795 auctions with a 58.6% clearance rate from 65.1% across the 1,259 homes taken to auction last February.
The trend is paralleled in the drop of home value in capital cities throughout the country. There has been a 7.9% decrease over the 12-month period stretching to February of last year. The bulk of the lost value lies in Sydney, Melbourne, and Perth.
Brogan expects several upcoming events to further impact market activity. “You’ve got the NSW state election as well as the federal election, where housing policy – or taxation as it affects housing – is going to be one of the key election issues,” he explains.
Since CoreLogic began collecting data in 2008, the lowest auction clearance rate on record occurred in December of 2018, when just 40% of listed auctions resulted in a sale.
Last week’s auction clearance rising to 54.1% after hovering below the 50% mark for five consecutive weeks in November and December 2018, fits the trend established in prevoius years. It’s typical for the auction clearance rate to drift up in February and March before again trending lower in autumn and winter.