Auction markets have strengthened in Sydney and Melbourne but uncertainties over the duration of the lockdowns have kept volumes substantially lower compared to the five-year average, data from CoreLogic shows.
More than eight in 10 (84 per cent) of the 519 reported auction results in Sydney were successful, up from 82.7 per cent a week ago. This was the highest clearance rate achieved since mid-April.
Of the 436 successful sales, more than half (55.5 per cent) were sold before auction day.
Sydney-based buyer’s agent Dan Grantham said low stock has spurred buyers to put in strong offers on properties to take them off the auction market.
“It’s not uncommon to see people go through a property and look at exchanging the contract on that day or put strong offers right away, simply because there are not enough properties to choose from at the moment, so they’re happy to act with speed,” he said.
Among the properties to achieve strong results under the virtual hammer in Sydney were a house in 164 Albany Road, Stanmore, which was sold for $2.651 million – $151,000 above the reserve price.
No property inspections
In Melbourne, the clearance rate jumped by 9.8 percentage points to 44.5 per cent from a week ago. This was the third week running where Melbourne’s clearance rate came in below 50 per cent, dragged down by a large number of auction listings being pulled without being rescheduled.
CoreLogic research director Tim Lawless said while the withdrawal rate had eased this week from the 62 per cent recorded last week to 54 per cent, it remained elevated.
“This is not surprising given the restrictions that prevent property inspections, although the withdrawal rate seems to be easing off a bit and has less of a drag-down effect on the overall clearance rate this week,” Mr Lawless said.
The Canberra auction market was also affected by a further extension of lockdown conditions which, similar to Melbourne, prevent one-on-one property inspections.
More than a third (36 per cent) of Canberra auctions were withdrawn, weighing on the clearance rate, which has fallen to 57 per cent, from 63.2 per cent last week.
Before the current lockdown, Canberra was clearing persistently around the high 80 per cent to nearly 90 per cent of homes taken to auction.
Adelaide posted a 75.7 per cent clearance rate while Brisbane notched 78.8 per cent. Nationally, clearance rate rose to 67.3 per cent – up from 55.4 per cent last week.
Spring was off to a slow start with auction volumes rising by just 1.8 per cent in Sydney to 609 over the week, while Melbourne plummeted by 42.8 per cent to 531 homes.
Compared to the five-year average, Sydney was down by 20 per cent and Melbourne by 39 per cent, according to CoreLogic.
Louis Christopher of SQM Research said the uncertainty over when open inspections would be allowed continued to weigh on vendor sentiment.
“I think many vendors are not rescheduling their sale because they have no confidence that there will be buyers on auction day as one-on-one inspections have been banned in Melbourne,” he said.
“And they will continue to do so until they get certainty from the government that buyers can inspect the home in person.
“This is one of the main reasons why we’ve seen such a difference between Sydney and Melbourne in terms of the auction clearance rate.”
Domain’s chief of research and economics, Nicola Powell, said listings were likely to bounce back strongly in Melbourne once the restrictions were lifted for open homes, but prices were unlikely to rise substantially.
“I think as soon as we get a clear road map out of lockdown, market activity will rebound in Melbourne because there’s pent-up supply that had been building up, but I’m not expecting values to rise by as much as last year because many buyers are already priced out of the market,” she said.
Auction numbers in lockdown-free Brisbane and Adelaide were more in line with spring conditions, at 148 and 157 respectively.
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/clearance-rates-lift-as-listings-dry-up-20210905-p58ovw