Auction volumes are again set to drop this week, disrupted by the annual Melbourne Cup carnival, with celebrations kicking off this weekend ahead of next Tuesday’s (1 November) big race.
After last week saw national auction levels rise above for just the third time since June, CoreLogic is predicting activity to fall 8.3 per cent to 1,989 — just shy of the coveted 2,000 mark.
Given Melbourne was by far the busiest of all the national capital cities last week, hosting over half of the auctions, the decline in national activity is being attributed to the Cup festivities taking place across the Victorian capital this week. All other capitals are expecting a week-on-week activity increase.
This week’s activity is 43.9 per cent down on the same time last year, when strong selling conditions characterised the annual spring selling season and saw 3,546 homes go under the hammer.
In Melbourne’s absence, Sydney is set to become the busiest capital city this week with 818 homes scheduled for auction, up 29.4 per cent on the previous week’s 632. The Harbour City ended the previous week with a final clearance rate of 60.4 per cent, while withdrawal rates climbed to 17 per cent.
Ryde was the city’s best-performing subregion after 80 per cent of its 25 auctions returned a positive result.
Melbourne drops to second place this week, expecting a 48.3 per cent week-on-week activity decline with 601 auctions scheduled. The Victorian capital registered a 62 per cent clearance rate at the conclusion of last week, buoyed by the 72.4 per cent success rate of the 192 auctions in the city’s inner south, its most successful region.
Across the smaller capitals, Brisbane remains the busiest as a forecasted 46.9 per cent activity increase should see the Queensland capital host 216 auctions.
With activity expected to double from last week, Canberra’s 171 auctions will make the coming week the busiest in the national capital since Easter when it held 208. Adelaide is also expecting an increase in volume, from 130 auctions last week to 156 this week.
There are 26 homes scheduled to go under the hammer in Perth, whereas one is scheduled in Tasmania.
Wrapping up the market’s September performance
Coinciding with this week’s update, CoreLogic analysis has revealed that the September quarter was the quietest period for auction activity since the three months leading to March 2021.
Nationally, 23,0867 homes went under the hammer as clearance rates and values softened, while interest rate rises also compounded buyer caution — this figure is down from 31,439 held during the June quarter.
Tim Lawless, research director at CoreLogic, confirmed lower activity was indicative of weaker consumer sentiment and fewer listings.
“Lower auction volumes are just another indicator of the rapid change in market conditions as sellers also adjust to increasing interest rates and fewer buyers,” he said.
He said that, while spring is typically the peak time for sellers to list their property — hence the term “spring selling season” — this has not been the case in 2022 as “the majority of cities and rural areas [are] yet to see the normal seasonal upswing in freshly listed properties hitting the market.”
The September quarter also saw the lowest Australian clearance rates (56.4 per cent) since June 2020, when the COVID-19 pandemic was in its infancy. These results represent a 15.2 per cent drop from the 71.7 per cent recorded in the same quarter of 2021.
“Clearance rates have been falling each quarter just as the rate of growth in property values has slowed,” he said.
“The combined capital city clearance rate hit a record peak of 80 per cent in March 2021 and has gradually declined ever since. However, the monthly trend in clearance rates has shown a consistent rise in auction clearance rates, with the weighted average capital city clearance rate firming around 60 per cent each week in September.”
Adelaide was the best-performing capital city throughout the quarter with 67.7 per cent of its auctions returning a positive result, followed by Tasmania (58.8 per cent), Melbourne (58.5 per cent), Canberra (57.5 per cent), and Sydney (55 per cent).
Corelogic did caveat that activity levels in Tasmania are comparatively incredibly low compared to other cities — with just 17 auctions held in the three months to September.
Perth and Brisbane were the only capital cities to record a clearance rate below 50 per cent, at 38.8 per cent and 43.9 per cent, respectively.
Regarding volume, Melbourne hosted the most auctions throughout the quarter (9,107), followed by Sydney (8,776), and Brisbane (1,970) in the podium places.