Australia's auction market reported a significant dip in auction clearance rates over the weekend as the market adjusts to the "new normal" amid the COVID-19 outbreak, according to CoreLogic.
Around 3,203 homes were scheduled to be auctioned across the combined capital cities — this would have been the busiest weekend of the year so far. However, due to the policies banning public gatherings, the auction withdrawal rate hit 40%.
Given the high rate of withdrawals, the preliminary clearance rate slumped to 51.4%, the lowest reading since the market recovery in June 2019.
These results were anticipated, given the increasing uncertainty from both the buyers and sellers and the shift towards remote auctions, said Catlin Fono, analyst at CoreLogic.
"Considering the rapid transition to on-line auction formats, some agents reported technical challenges and connectivity issues; no doubt many of these challenges will be resolved with the benefit of more time to prepare," Fono said.
The table below shows the performance of each capital city auction market:
Fono said there was a surge in the proportion of properties sold before the auction, from 22% to 36%.
"There are likely to be a range of reasons for more auctions selling before the scheduled date, including auctions that were brought forward to beat the ban and vendors motivated to offload their property before lockdown policies potentially escalate," she said.
With the current ban on public auctions, Fono said fewer listings might be recorded over the coming months as sellers shift to private listings or withhold plans of selling until confidence improves.
However, Fono said it will be interesting to see if the innovative strategies real estate agents are exploring will make a difference.
"Overall, we are expecting a substantial drop in new property listings, regardless of the selling method, as buyers and sellers retreat to the sidelines and wait for some certainty to return to their decision making," she said.
