The CoreLogic Quarterly Auction Market Summary released yesterday shows the strongest results in a year, with an auction clearance rate of 55.5% across the 18,104 auctions in the combined capital cities over the three months to June 2019.
The figures were up from the previous period, which saw a 49.9% clearance rate across 14,647 auctions.
However, while the quarterly results were strong and the final clearance rate has held above 60% for the last four weeks, recent auction volumes remain significantly down year on year.
Last week, there were 854 homes taken to auction across the combined capital cities returning a preliminary clearance rate of 69.0% as compared to the 1,178 auctions and clearance rate of 52.0% the same week last year.
In Melbourne, there were 352 auctions held with a preliminary clearance rate of 73.6%. Over the same week in 2018, a clearance rate of 56.2% was recorded across 559 auctions.
Sydney recorded a preliminary clearance rate of 77.2% across 318 auctions, as compared to last year’s 46.9% clearance rate and 408 auctions.
CoreLogic national auction market commentator, Kevin Brogan, noted that while there is an expected reduction in volume in the winter months, the figures from this year are substantially lower than the corresponding period that would have faced the same seasonal factors in 2018.
“All of the indicators are encouraging for anybody looking to list, but it just doesn’t look as if they’ve actually acted on it yet,” he said.
“We’re seeing the demand side, but let’s have a look at what happens when the supply side gets going. Until we do, it’s a bit of an unknown.”
“If we did have a really big injection of properties coming to auction, then that’s going to exert a downward pressure on clearance rates, so how resilient they are is what we’re all watching out for,” he added.
Despite the strong sentiment implied by the high clearance rates, Brogan advises reasonable expectations for the market’s trajectory.
He explained, “I don’t think in the short to medium term we’re going to return to anything like the strength of market conditions we saw in 2017. We’re going to normalise, but I don’t think we’re going to head to the strength of activity and the speed at which that market was travelling.”