Last week, the combined capital city preliminary auction clearance rate rose above 60% for the first time since March, with 64.5% of homes selling.
However, the higher clearance rate was across a lower volume of auctions – with 473 auctions as compared to 612 the week prior, according to CoreLogic data.
Of the 333 results collected over the week, 22% returned a withdrawn result, which is a dynamic that has been muddying the figures since the beginning of the COVID-19 pandemic as CoreLogic counts a ‘withdrawn’ property as a non-sale.
From the week ending 29 March to the week ending 3 May, the portion of scheduled auction events withdrawn averaged 45.8% across the combined capital cities market. This is about eight times the five-year average rate of withdrawn properties prior to COVID-19, which was 5.7%.
Understanding auction numbers during COVID-19 is crucial, as they’re often used as a measure of the robustness of property prices.
“Ultimately, most of the decline in the clearance rate can be explained through an engineered slowing of auctions,” explained CoreLogic head of research, Eliza Owen.
“This is important to note, because clearance rates and changes in home values have historically been closely correlated.
“At face value, the sharp fall in clearance rates implies housing values could follow a similar trend; however, there is a good chance the relationship has at least temporarily disconnected due to the high withdrawal rate dragging the clearance rate to artificial lows.”
With the news that the ban of on-site auctions and inspections will be lifted in New South Wales, Western Australia, South Australia and Queensland, along with the broader relaxation of social distancing policies, CoreLogic has predicted a lift in confidence and volumes over the coming weeks.