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Melbourne lockdown raises auction withdrawal

The percentage of auctions withdrawn in Melbourne was more than double Sydney’s withdrawal rate owing to the second round of lockdown in the city.

There were 1,202 homes taken to auction during the week ending 12 July across the combined capital cities. Of the 672 results that have been reported so far, there was a 62.2 per cent preliminary clearance rate.

“The number of results collected at a preliminary stage are lower than usual as we seek to confirm the status of scheduled auctions,” the CoreLogic analysis said.

In the previous week, 1,224 homes taken to auction, which returned a final clearance rate of 60.2 per cent.

In the corresponding period last year, a total of 847 homes went under the hammer, with a final clearance rate of 65.4 per cent.

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There were 475 auctions scheduled in Melbourne last week, up from 456 over the week prior, and 348 auctions over the same week last year.

Of the 256 results collected so far for last week, there was a 63.7 per cent preliminary clearance rate, while 24.6 per cent were reported as withdrawn. This compares with only 12.2 per cent of auctions withdrawn in Sydney.

The CoreLogic analysis said the higher withdrawal rate was "not surprising", and attributed this to the announcement last week that metropolitan Melbourne and the Mitchell shire would enter a six-week lockdown at midnight on 8 July. Real estate auctions can only occur remotely, while property inspections can only take place through a private appointment.

The previous week saw a final clearance rate of 60.6 per cent, while this time last year, 70.6 per cent of Melbourne auctions reported a successful result.

A total of 538 homes were scheduled for auction last week in Sydney, down from 580 over the previous week. However, this was higher than the 316 homes taken to auction in the corresponding period last year.

Of the 294 auction results collected so far, 62.6 per cent were successful. This compares to the previous week which reported a final clearance rate of 61.5 per cent, while a clearance rate of 72.8 per cent was recorded this time last year.

Across the other capital cities, Brisbane held 82 auctions, which returned a preliminary clearance rate of 52.8 per cent, while Adelaide held 48 auctions with a 65.5 per cent successful rate.

There were 58 auctions in Adelaide in the corresponding period last year, with a 44.4 per cent clearance rate.

In Canberra, there were 45 auctions with a preliminary clearance rate of 64.5 per cent. This time last year, there were only 36 auctions, with a higher clearance rate of 66.7 per cent.

Perth recorded a preliminary clearance rate of 37.5 per cent on a low volume of only 13 auctions last week.

Mortgage activity plunges

Meanwhile, demand for housing finance has plummeted across the country and in every state and territory.

The CoreLogic data has shown that the mortgage market activity index has dropped by 16.5 per cent nationally month-on-month for the week ending 12 July.

Western Australia has recorded the steepest decline in demand for home loans of 22.1 per cent, followed by Victoria (19.8 per cent), NSW (13.5 per cent), Queensland (11.3 per cent), Tasmania (9.1 per cent), and South Australia (8.8 per cent).

These figures coincide with data released by the ABS last week, which revealed the full impact of the COVID-19 pandemic on home loan approvals.

The Lending Indicators data showed that the value of home loan approvals fell by 11.6 per cent (seasonally adjusted terms) to $16.4 billion in May – the biggest fall in the history of the series.

CoreLogic data released in May also showed a sharp fall in home loan activity, dropping 16.5 per cent month-on-month for the week ending 3 May.

The latest data from CoreLogic has also shown a slight fall in capital city home values, which declined by 0.9 per cent over the past 28 days across five capital cities.

Melbourne is still leading the capital cities in terms of declines, dropping by 1.2 per cent, while Sydney posted a decline of 0.9 per cent.

Home values fell by 0.9 per cent in Brisbane, 0.7 per cent in Perth, and 0.2 per cent in Adelaide.

[Related: Auction clearance rates up, volumes down]

Melbourne lockdown raises auction withdrawal
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