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Melbourne lockdown to drag clearance rates

Auction withdrawals remain comparatively high in Melbourne amid the coronavirus lockdown, and this will likely drag down clearance rates.

CoreLogic auctions data for the week ending 19 July revealed that there were 499 auctions scheduled in Melbourne, similar to the previous week when 506 homes went under the hammer.

Preliminary results have shown that of the 413 results collected so far, 47.5 per cent were successful, while 43.6 per cent were reported as withdrawn. This compares with only 15.1 per cent of homes withdrawn from auction in Sydney.

The figures have come amid a six-week lockdown imposed in metropolitan Melbourne and the Mitchell Shire to curtail the rising spread of the coronavirus in Victoria.

“As mentioned in the previous week, the withdrawn numbers are not overly surprising, given that Melbourne is currently in lockdown,” the CoreLogic Property Market Indicator Summary said.

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The previous week saw a final clearance rate of 51.2 per cent.

This time last year, there were 410 homes taken to auction with 67.5 per cent reporting a successful result.

“With restrictions in place across Melbourne for another four weeks, we are likely to see more auctions being withdrawn from the market than normal, which will drag the clearance rate lower, the summary said.

Excluding withdrawn auctions from the clearance rate calculation, and focusing just on those auctions that went ahead, they returned a much higher “adjusted” preliminary clearance rate of 84 per cent. More than half of these homes, or 55 per cent, were sold prior to the auction rather than during the auction or post-event.

Nationally, there were 1,167 homes scheduled to go under the hammer for the week ending 19 July across the combined capital cities, down from 1,269 over the previous week, although higher than the 896 homes taken to auction last year.

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Of the 938 results that have been reported so far, 59.2 per cent were successful, up from the previous week’s final clearance rate of 56.2 per cent, and lower than this time last year of 65.4 per cent.

A total of 512 homes were scheduled for auction in Sydney, down from 566 over the previous week, but higher than the 303 homes scheduled for auction one year ago.

Of the 411 auction results collected so far, the preliminary clearance rate was 68.9 per cent, although this is poised to revise lower once the remaining results are collected.

In comparison, the previous week reported a final clearance rate of 61.8 per cent, while this time last year the clearance rate was 72.8 per cent.

Across the other capital cities, Canberra recorded the highest preliminary clearance rate of 90.6 per cent across a lower volume of 34 auctions.

Brisbane recorded a clearance rate of 59.1 per cent across 62 auctions, while Adelaide returned a success rate of 64.3 per cent across 43 auctions.

There were only 17 auctions held in Perth, with a preliminary clearance rate of 40.0 per cent.

Figures for capital city properties listed for sale have shown that the number of total listings has declined by 14.3 per cent across the combined capitals over the last 12 months to 85,077 listings.

Perth led the capital city declines, dropping by 28.0 per cent over the last 12 months to 14,335 total listings, while listings dropped by 27.8 per cent in Canberra to 1,789.

Darwin listings dropped by 25.5 per cent to 806, Hobart by 23.9 per cent to 849, Brisbane by 21.9 per cent to 17,113, and Adelaide by 18.9 per cent to 6,232.

While total listings in Sydney declined by only 7 per cent to 20,167, Melbourne was the only capital city where listings increased, by 1.7 per cent to 23,786 total listings.

The number of new listings has increased by 10.2 per cent over the last 12 months to 19,811 listings.

[Related: Housing sentiment defies broader mood]

Melbourne lockdown to drag clearance rates
Melbourne lockdown to drag clearance rates
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Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.

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