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Auctions skyrocket to reach new record: CoreLogic

Nearly 5,000 properties were taken to auction last week, reaching a new record high, but clearance rates continue to decline.

CoreLogic has recorded that the highest figure of auctions across Australia’s capital cities since it began archiving the results in 2008 was reached last week, with the number of properties for sale almost reaching 5,000.

The recorded figure (4,970) comes after last week’s (week ended 5 December) total of 4,153 auctions – then considered to be CoreLogic’s second-highest recorded figure. 

Compared to the number of listed properties during the same week in 2020 (2,580), this latest figure represents a surging increase of almost 93 per cent. 

Melbourne was reported to have the highest figure of auctions across each of the capitals, accounting for 2,309 properties – the highest on CoreLogic’s records since the week ended 25 March 2018 (2,071). 

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Sydney also recorded a new listing record for the first time in over seven years, with 1,797 homes being taken to auction. The previous record, 1,631 as per CoreLogic’s data, was the week ended 30 November 2014.

Adelaide (309), Brisbane (305) and Canberra (217) were also reported as having their busiest auction week on record.

But while these figures indicate a growing rise in the number of properties being listed for sale, this same data notes that this week’s preliminary clearance rate is 66.6 per cent – said by CoreLogic to be the lowest since August. 

By comparison, last week’s preliminary clearance rate was 69.9 per cent, with the final rate dropping to 66.3 per cent. 

The week prior, which saw 4,251 auctions across the capitals, also scored a final clearance rate of 68.5 per cent. 

For the week ended 12 December, Sydney and Melbourne, despite reaching the highest figure of auctions, reported clearance rates so far of 63.6 per cent and 65.3 per cent respectively, with the former potentially facing a final figure below 60 per cent for the first time since August 2020. 

Only Perth, which reported 26 auctions during the period, scored a lower clearance rate (27.3 per cent). 

The clearance rates for Adelaide (83.7 per cent), Canberra (75.7 per cent), and Brisbane (72.6 per cent) were the only three recorded capital cities to exceed the weighted average (66.6 per cent). 

As to what is driving this decline, some speculate that it’s a combination of factors, such as rising fixed rates and insurmountable prices. 

Commenting on Domain’s clearance figures for Sydney and Melbourne for the week ended 11 December, AMP head of investment strategy and economics Dr Shane Oliver tweeted on the same day that, despite “ultra strong sales”, the nearing holiday period was a key factor in decreasing demand. 

Dr Oliver also noted that the combination of rising fixed rates and poor housing affordability should contribute to a further slowing.

Published earlier this month, a report from SQM Research speculated that, given the current framework of regulations and inflation, housing prices will grow by 5 per cent at most during 2022, before potentially moving into a decline the following year. 

Speaking of the report at the time, SQM Research managing director Louis Christopher said that, as this year draws to a close, the national housing market has already begun to show signs of a peak.

“Auction clearance rates have fallen from their highs amid record listings,” Mr Christopher said. 

“However, we may also be recording some seasonality and pent-up selling after vendors held off listings during the lockdown.

“Nevertheless, we expect the market to peak in 2022, with further expected intervention by APRA, which could come as early as next month, halting the price momentum.”

[Related: Second chance for government's unused FHB grants]

Auctions skyrocket to reach new record: CoreLogic
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