Over the past few years, auctions in many of our capital cities have been a bit in-between because they’re haven’t been flat, but they haven’t been hot either. 

Vendors have opted to auction sometimes, but other times they haven’t. 

This is common in market conditions that are probably best described as being a bit beige.  

Let me explain further. 

In strong market conditions, more vendors opt to auction their properties to make the most of increased buyer demand and competition amongst bidders. 

When the market is somewhat quiet, though, the reasons to go to auction aren’t as obvious, so it becomes more about not making a pricing mistake on their property. 

And in bad market conditions, people are often forced to auction to secure a sale of their property, sometimes because of financial problems. 

So, what we’ve seen over recent times, the number of auctions has been rather so-so. 

However, the early indications of market conditions for this year is for stronger activity as well as bidder competition, partly due to low interest rates, less conservative lending, as well as the mechanisms of normal market cycles.  

In fact, the number of people through open homes is already robust, according to many agents. 

Buyer confidence on the way up 

Confidence is key for many markets this year and is already on the way up in Sydney. 

What is interesting is that auctions in Sydney have rebounded so quickly, which is a clear signal that market conditions are in positive territory. 

It is unusual for that to happen so rapidly, when this time last year market conditions were less than ideal in the Harbour City with property prices generally softening.  

One can only presume that this early indicator bodes well for that market this year. 

Indeed, property researchers have indicated that most city markets should be solid in 2020. 

In fact, auction clearance rates are already showing this renewed confidence. 

According to CoreLogic, over the three months to December 2019, the combined capital cities auction clearance rate came in at 70.3 per cent from 26,923 auctions, which was a significant jump in volume on the previous quarter where auction volumes were 16,730. 

The clear sign that confidence has returned to most markets is that the clearance rate was remarkably higher than the December 2018 quarter, when it was just 43.6 per cent. 

Of course, that is a remarkable turnaround in just 12 months, given markets usually move more slowly that this metric seems to indicate. 

Auction activity is generally quiet over the Christmas period so we will have to wait for another week or two for the first round of auction results data to be released.

Then we will be able to see whether the strong results at the tail end of last year have carried through to this one. 

Even without that data on hand, though, all signs are pointing to much improved market conditions, with savvy homebuyers and investors already circling the best opportunities.