Auction Report – October 2022
Clearance rates bounced to a seven-month high across the combined capitals and combined regionals reaching 61.0% and 52.6% respectively.
Auction volumes across the combined capitals and combined regionals have risen for the second consecutive month.
Clearance rates are above 60% across all capitals, apart from Brisbane.
The expected seasonal spring lift in auction volumes occurred in all capitals, apart from Sydney.
House clearance rates outperformed units in Sydney and Melbourne but Brisbane, Adelaide and Canberra saw unit clearance rates perform better.
October saw clearance rates jump to a seven-month high across the combined capitals and regional Australia. All capital cities saw a monthly rise in clearance rates but they continue to trend lower annually.
The overall improvement highlights that sellers have become more adjusted to pricing their homes to meet the expectations of buyers battling sliding borrowing power and deteriorating mortgage affordability.
Geographies are based on ABS GCCSA geography. Auction reporting rates are 84.9% in Sydney, 89.7% in Melbourne, 66.6% in Brisbane, 81.3% in Adelaide and 78.7% in Canberra.
Clearance rates are above 60% across the combined capitals for the first time since April, indicating a more balanced auction market between buyers and sellers (figure 1). Clearance rates have increased for the third consecutive month, providing the biggest monthly jump since February and the highest clearance rate since March.
Similarly, the combined regional clearance rate increased for the third month in a row. This is the largest monthly increase since February 2021 and the highest clearance rate since March. Clearance rates in regional Australia have seen a significant improvement, the biggest monthly jump since February 2021.
These stronger results have been achieved on lower auction volumes compared to last year, this could be helping to support a higher clearance result.
Figure 1. Combined capitals and combined regionals clearance rate, by month.
Sydney’s clearance rate increased for the third consecutive month, its biggest monthly improvement since February and the highest clearance rate since March. However, the clearance rate remains lower over the year, down almost 15 percentage points.
Melbourne saw a jump in its clearance rate for the third successive month, the first time this has happened since March 2021. October recorded its highest clearance rate since April and the third consecutive month of a rate above 55%. Melbourne is lower annually by 11 percentage points.
Brisbane’s clearance rate increased for the third month. However, it’s seeing a significant annual decline due to unusually high clearance rates last year as a result of a booming property market. Brisbane is a less auction-centric property market therefore clearance rates can be volatile and is now seeing the performance return to historic standard.
Adelaide continues to outperform all the capital cities – recording the highest clearance rate – and the only city above 65%. It is the first time since April 2021 clearance rates have improved for three consecutive months. Despite this, Adelaide is still following the broader slowing trend after falling annually by 5.5 percentage points.
Canberra’s clearance rate increased for the second successive month for the first time since October 2021. It is now sitting at 65.0%, its highest point since May. Although, it is still seeing the largest annual fall among the capitals.
Figure 2. Clearance rates.
Auction volumes have seen a rise for the second month in a row across the combined capitals but are lower annually (figure 3). Melbourne, Brisbane, Adelaide and Canberra saw a monthly increase in auction activity which is expected in spring. However, Sydney declined, highlighting how the downturn is impacting seller sentiment and sale method.
Volumes are also up for the second successive month in the combined regionals but still remain lower annually.
Figure 3. The auction volume and clearance rate, by month.
Sold prior and withdrawn
For the combined capitals, the proportion of properties sold prior to auction day increased for the third consecutive month. It is at its highest point since April but remains lower compared to 2021. While rising sold priors can mean different things under varied market conditions, it does suggest fewer buyers have placed greater pressure on sellers to accept an offer prior to auction.
The proportion of withdrawn auctions fell this month to its lowest point since February, meaning sellers have become more confident in proceeding to auction than they did through the winter months.
For the combined regionals, the proportion of properties sold prior to auction day jumped for the second month in a row. It is at its highest point since March but continues to trend lower compared to 2021. The proportion of withdrawn auctions dropped to its lowest point since October 2021.
Houses and units
Across the combined capitals, house clearance rates continue to outperform units (table 2), with the gap narrowing in October. Sydney and Melbourne followed this trend while Brisbane, Adelaide and Canberra saw unit clearance rates perform better. This aligns to current price trends as units hold firmer than house prices. House clearance rates continue to see a more significant annual drop due to the influence of affordability and borrowing capacity. Unit clearance rates have improved monthly and annually in Adelaide and Canberra. All capital cities recorded a positive monthly change in house and unit clearance rates.
Melbourne was the only city to see a positive monthly change in its auction house price and Adelaide the only positive annual change (table 3). Brisbane houses recorded the biggest monthly and annual drop among the capitals, aligning with the accelerating fall in prices over the last three months. Brisbane units fell over the month but have improved annually. Canberra’s auction unit price saw the only positive monthly and annual change, aligning with the strong unit clearance rate. Adelaide units recorded the biggest monthly and annual drop among the capitals.
Clearance rates by region
Table 4. Clearance rates by region.
The Domain auction clearance rate is the percentage of properties successfully sold prior to, or at, an auction. The clearance rate is calculated by dividing auction sales by the number of reported auctions, including those withdrawn or postponed.
Domain aims to collect all auction outcomes, which can take longer in some states. Cities with a reporting rate below 95% are considered to be preliminary. Perth, Hobart and Darwin are not included due to either low volumes of scheduled auctions or the lag time for collections.
Domain records began in 1995 in NSW, 1997 in Victoria, 1999 in the ACT, 2001 in Queensland and 2002 in South Australia.
Auctions scheduled: The number of all auctions scheduled for the day, including those that were withdrawn from auction at the last minute. Reporting rate: The number of auction results collected by Domain out of the total auctions. Auction sold: Property sold under auction conditions, or prior to auction. Withdrawn: Property did not go to auction. Passed in: Property did not sell at auction. For the purpose of calculating auction clearance rates, properties sold after auction are considered passed in results.
Please note, monthly trends exclude January from analysis due to weak volumes.