Australia’s auction market ended May 2023 on a strong note, achieving an annual high clearance rate.
Auction markets in Australia seemed to have emerged from a “tumultuous” year after cash rate increases hampered the sentiment of potential buyers.
According to Apollo Auctions’ latest report, clearance rates in May reached 67%, the highest in a year since the first hike in cash rate last year.
Apollo Auctions director Justin Nickerson said clearance rates in May 2022 was at a healthy rate but the beginning of the tightening of the monetary policy triggered a moderation in the auction markets.
“Over the course of the past year, we have seen the auction clearance rate hit a low of 49.48% in June last year and then steadily strengthen – albeit with a flat-lining period towards the end of last year – when the clearance rate hit 61.01% just before the Christmas holiday season,” he said.
Since February this year, auction take-up has risen month-on-month, from 60.4% back then to the current level of 66.93%.
One of the highlights last month was the increase in the average number of registered bidders, but a small decline in the average number of attendees and active bidders.
“With the course of interest rates still somewhat unclear, but with strong buyer demand and persistently low volumes of stock available, there continues to be positive market auction market conditions across the nation.
Tight supply supporting sales
|
Region |
Average |
Share |
||
|
Attended |
Registered |
Active Bidding |
Sold |
|
|
Brisbane |
38.7 |
4.5 |
62.23% |
72.41% |
|
Gold Coast |
25.6 |
3.3 |
64.12% |
57.14% |
|
Sydney |
34.0 |
5.0 |
49.76% |
65.63% |
|
Melbourne |
25.9 |
3.2 |
N/A |
82.61% |
|
Northern Rivers |
36.7 |
4.6 |
36.67% |
57.14% |
|
Perth |
70.7 |
7.7 |
39.13% |
66.67% |
|
Average |
32.18 |
4.71 |
50.38% |
66.93% |
Across major markets, it appears the lack of supply is pushing for the higher share of successful auctions.
Mr Nickerson said Brisbane is one of the strongest auction markets in the current conditions, especially when looking at the average number of registered bidders.
“The lack of stock on the market helps to explain why the number of registered bidders remains high with many buyers showing clear signs of FOMO as well as a strong desire to purchase immediately in Brisbane,” he said.
The robust conditions also manifested over onto the Gold Coast, where the only stock not selling were the ones where owners refuse to meet the market.
In the Northern Rivers region of New South Wales, supply was an all-time low, which also helped boost the take-up.
“Mark says non-coastal homes are coming on to the market with more frequency – as buyers are recognising the value of property within 15 kilometres of their coastal neighbours – and this includes residential blocks as well as large land holdings,” Mr Nickerson said.
Across Melbourne, family homes and first-home buyer properties were doing well.
“However, the challenge is keeping vendors on an even-keel because whenever the media talks the market up, vendors have a tendency to get carried away with their aspirations,” Mr Nickerson said.
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Photo by RichLegg on Canva.
