A great way to take the temperature of Australia’s property market is to watch the auction results come in.
The numbers vary from week to week, but the trend rarely deviates substantially in terms of providing a sense of the market sentiment.
A clearance rate of more than 70% is an indicator of a strong market.
In the last week of October, we approached that benchmark.
There were 3,076 auctions held across the capital cities of Australia in that week, according to CoreLogic, the industry researcher.
That’s a greater volume than at any time since last Easter, when 3,519 went under the hammer.
Clearly, sellers are out in force for the spring selling season, even though the much-anticipated cut in the interest rate by the Reserve Bank of Australia has failed to materialise.
Our clearance rate was 66.8%, which is healthy but subject to revision once it’s clear how many deals did not complete for whatever reason.
Over half of the auctions (52%) were in Melbourne, which is struggling more than any other capital city to maintain its values right now. Basically, the city has an over-supply of apartments, which is dragging down average values.
Its clearance rate was 68.5%, which may indicate the market is turning.
The best clearance rates were in Adelaide (73%) and Perth (70%) – the strongest property markets over the past six months.
The bellwether market of Sydney delivered a 64% clearance rate and Canberra edged higher to 66%.
The once runaway Brisbane market seems to have cooled for the timebeing, delivering a 58% result.
There were insufficient auctions in Hobart to deliver a meaningful reading, but overall the clearance rate for the combined state capitals was 66.8%.
A takeaway from this result for sellers is pretty clear – don’t assume that because you’re going to auction you will automatically complete a deal.
If your property passes in, your agent’s role is critical.
They will follow through relentlessly with the unsuccessful bidders to try to negotiate a deal outside the auction process.
Even if your property didn’t sell under the hammer, all is not lost – so long as you have a great agent!