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Auction results reveal tale of two cities

Melbourne has continued to see lower levels of auction activity and higher withdrawal rates amid the lockdown, while Sydney auction volumes have trended higher.

CoreLogic auction data for the week ending 23 August have shown that auction performance across the two largest capital cities in Australia have varied, due to the lockdown restrictions imposed on Melbourne and parts of Victoria to curb the spread of the coronavirus.

In Melbourne, preliminary results have shown that half of the homes taken to auction last week were successful, down on last week’s preliminary figure of 63.6 per cent, and a final clearance rate of 53.7 per cent.

The lower clearance rate was across a slightly higher number of auctions held, with 223 homes taken to auction, up on the 191 over the week prior.

Withdrawal rates have remained high, with the data showing that of the 183 results so far, 41 per cent were reportedly withdrawn auctions, which is higher than the previous week’s final withdrawn rate of 33 per cent.

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The effects of the lockdown are evident in figures around the number of properties listed for sale, with Melbourne posting a 59.2 per cent decline in the number of new listings over the past 12 months, the largest decline out of all the capital cities. A total of 2,517 properties have been listed for sale in Melbourne over the past month.

On the other hand, auction volumes have inched higher in Sydney over the past few months and consistently higher year-on-year.

Sydney returned a healthy preliminary auction clearance rate of 71.9 per cent across 632 homes that were taken to auction.

This was higher than the previous week’s preliminary figure of 67.8 per cent, which later revised down to 61.9 per cent. However, volumes were higher the previous week, when 668 homes went under the hammer.

One year ago, 503 homes were taken to auction in Sydney, with a higher success rate of 78.1 per cent.

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The number of properties listed for sale in Sydney has increased by 7.2 per cent over the past 12 months, with 5,880 new properties listed for sale over the past month.

Nationally, the clearance rate and number of homes taken to auction have stabilised each week, with volumes hovering the 1,100 mark, and final clearance rates around the mid-to-high 50 per cent range.

A total of 1,082 capital city homes were taken to auction last week, a slight increase from the 1,046 homes auctioned the week prior.

The combined preliminary clearance rate was 64.7 per cent, slightly higher than the previous week’s 64.3 per cent, which later revised down to a final figure of 58.4 per cent.

Across the capital cities, Canberra returned the highest preliminary success rate, at 87.8 per cent across a total of 64 auctions.

In Adelaide, a total of 61 homes went under the hammer, returning a preliminary clearance rate of 57.9 per cent, while Brisbane posted a preliminary rate of 48.1 per cent across 80 auctions.

There were 22 auctions held in Perth, with a preliminary clearance rate of 16.7 per cent.

Mortgage activity

National home loan activity has fallen moderately, with CoreLogic’s index value declining by 1.2 per cent month-on-month to 112.8.

Victoria led the drop in activity, posting a 4.1 per cent decline to 114.1.

Queensland was the only other state to post a month-on-month decline in mortgage activity, falling by 2.7 per cent to 105.7.

In contrast, South Australia performed strongly, with activity rising by 6.4 per cent, while Tasmania posted a 4.9 per cent increase.

Activity in Western Australia also increased, rising by 3.7 per cent.

Despite the overall decline in activity across Australia, the figures are a significant improvement from May, when rising unemployment and social distancing measures amid the COVID-19 crisis led to a steep fall in activity.

Home loan activity had fallen by 16.5 per cent month-on-month nationally for the week ending 3 May, with NSW posting the highest decline of 16.9 per cent.

[Related: Melbourne lockdown pounds auction volumes]

Auction results reveal tale of two cities
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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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