Auctions continue to captivate the public’s attention, the notion of a group of people battling it out in a bidding war with their dream home on the line continues to allure people.

Weekly auction statistics are read with great interest across Victoria.

The Real Estate Institute of Victoria (REIV) invests significant resources into producing accurate auctions statistics that provide an accurate view of the Victorian property market is performing. 

At a Glance:

• Weekly auction statistics are one of the most visible and talked about numbers
• Clearance rates can provide an insight into the level of desire among buyers
• Historically, auction clearance rates have been a good indicator of price trends

Our methods and processes have stood the test of time, never more so than now.

The pandemic and resulting restrictions made property transactions challenging for all involved.

Weekly auction statistics are one of the most visible and talked about numbers, often rightly so.

Clearance rates can provide an insight into the level of desire among buyers, high clearance rates indicate higher demand for local property.

Historically, auction clearance rates have been a good indicator of price trends.

Clearance rates provide a snapshot of the market, higher clearance rates lead to higher property values, and when clearance rates are lower, we often find that property values are also less expensive. 

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Source: REIV

So, what does it all really mean and how is it calculated?

What is a clearance rate? 

The clearance rate for the week refers to all properties sold by auction as a percentage of total reported auctions.

What does it indicate? 

A higher clearance rate can show strong buyer demand at that time.

It is important to remember that auctions account for approximately 20 per cent of all residential sales in Victoria.

The method of sale selected for a property depends on a range of factors.

The detail 

Reported Auctions: The number of auctions reported to the REIV, which includes properties that were sold by auction as well as those passed in. 

No assumptions i.e. if the REIV has not been advised of the result of a scheduled auction, we do not include that property in the results.

This ensures accuracy of information.

The weekly results published on REIV channels include the number of results reported.

On average REIV receives over 90 per cent of weekly auction results by the following Wednesday.  

Sold by auction:  A property sold under an Auction Authority and under Auction Conditions is counted as sold by auction.

This includes: 

• Sold before Sold prior to the commencement of a scheduled auction. 
• Auction sale Sold at auction or by negotiation on the same day following the conclusion of the auction.
• Sold after auction Sold on the day following the day of auction. 

Passed In: Property did not sell at the scheduled time of auction.

Postponed: The auction for a property has been re-scheduled to a later date.

This property and the outcome of the auction is included in the week the auction is eventually held. 

Withdrawn: Property did not go to auction as scheduled.

Common reasons include a change in method of sale or property is withdrawn from the market to be sold at another time. 

Some data analysts incorrectly treat “withdrawn” property as “passed in” assuming that the property did not sell.

The REIV does not include withdrawn auctions in the total reported auctions as that can be misleading.

The clearance rate is a measure of success of the auctions in that period.

A property where the method of sale may now be private treaty should not be considered as part of the auction process.

So why do clearance rates differ across providers? 

Another question that often gets put to me is why do weekly clearance rates differ from each reporting agency? 

Each reporting agency uses slightly different variations on the rules and definitions to calculate the weekly clearance rate. 

The REIV method only takes into account reported auction results, and we make no assumptions about the non-reported results.

Our data is directly sourced by our team, from the entire Victorian Market and not just Melbourne. 

Only properties that actually went to auction during the period, are included when calculating the clearance rate.

The clearance rate is a measure of success of the auctions in that period.

A property where the method of sale may now be private treaty should not be considered as part of the auction process.

When withdrawn properties are treated as a “passed in”, the outcome can be misleading. 

The pandemic has thrown many challenges, last-minute changes to methods of sale, auctions held mid-week, etc.

While number of transactions has fallen, properties that are being presented for sale via auction or private treaty, are selling well pushing up clearance rates. 

No measure should be looked at in isolation – which is why REIV publishes all details publicly here.

On our website you will not only find auction details for the week, you will also find private sales, number of scheduled auctions that were not reported, medians, days on market and more. 

The REIV method has stood the test of time and has been a true reflection of current buyer demand. 

In a market dominated by a pandemic, that has drastically reduced the number of auctions held, people have questioned why high clearance rates are still relevant. 

These are strange times, historically when the number of auctions drops, clearances rates also plummet.

This year despite Covid-19 the Victorian real estate market has scored consistently high clearance rates every week, buyers are still snapping up Victorian property as soon as they can. 

Monthly Auction Clearance Rates have not dipped under 70 per cent throughout this entire year in Victoria; despite Coronavirus, our market is outperforming last year. 

A reduction in the number of properties available for sellers has led to the demand for properties skyrocketing, and buyers are still hungry to buy real estate in Victoria.

A great demand for Victorian property has led to prices staying healthy. 

As the peak representative body for real estate in Victoria, the credibility and reliability of our data is very important to every homeowner, tenant, buyer in addition to the real estate sector itself. 

As always, if a buyer or a seller is looking for objective information on the market or an agency– they should visit here. 

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