Low rates, limited supply hold Sydney, Melbourne auction clearances aloft

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Feb 6, 2017

Low rates, limited supply hold Sydney, Melbourne auction clearances aloft

Sydney and Melbourne auction clearance rates held above 70% over the weekend, as the prospect of continued low interest rates spurred buyers to compete for scarce listings.

Image: Phillips Pantzer Donnelley

This property at 105 Hewlett Street, Bronte, sold for $5.45 million last week through Phllips Pantzer Donnelley.

Sydney and Melbourne clearance rates held above 70 per cent last week as volumes ticked higher, showing signs that the auction market is beginning to emerge from the holiday slow down.

Victoria's preliminary auction clearance rate for the weekend was 75 per cent, based on 321 scheduled auctions. New South Wales' clearance rate came in at 74 per cent, based on 427 scheduled auctions, according to Domain.

The country's third-largest auction market - Queensland - had 294 properties scheduled to go under the hammer on the weekend, but achieved only a 46 per cent clearance rate.

CoreLogic tracked 867 auctions over the week, with an overall preliminary clearance rate of 70.8 per cent, compared to last week’s 71.6 per cent across 368 auctions.

Though the number of auctions more than doubled over the week, volumes are still increasing at a slower rate than they did during the corresponding period last year, when 916 auctions were recorded with a similar rate of clearance (70.1 per cent), according to CoreLogic.

Despite overall lower auction volumes across the country compared with last year, chief auctioneer at McGrath, Scott Kennedy-Green, says the number of properties McGrath is taking to auction has actually increased year-on-year.

"While overall listing activity remains lower across the industry, our auctions continued to increase YOY across the McGrath network," he said.

Kennedy-Green said vendors are choosing to take their properties to auction to take advantage of intense competition for fewer listings.

"Vendors are keen to take advantage of the lighter volumes we are currently experiencing and are drawn to the competitive bidding that is often evident at auctions,” he said.

McGrath has booked 542 auctions for February 2017 in New South Wales, Queensland, Victoria and the ACT, compared with 517 for the corresponding period in 2016.

The auction market is still gathering momentum after the holiday break, and is expected to peak on the weekend of 25 February. Kennedy-Green said 25 February is scheduled to be February's busiest auction weekend, with 214 auctions scheduled across the network.