With the return of onsite auctions in both NSW and VIC, clearance numbers are steadily on the rise.
The initial clearance numbers from Domain, saw Sydney record a preliminary clearance rate of 67%, while Melbourne sold 70% of homes under the hammer.
The clearance rate numbers are now comparable to early March, prior to the Government enforced lockdown and banning of on-site auctions.
By way of comparison, this time last year, auction clearance rates were just 57% in Sydney and 58% in Melbourne. Sentiment was also soft last year in the leadup to the Federal election it was looking like a Labor victory and with it a host of policies set to threaten the property industry.
While the volume of listings still remains low, with onsite auction back underway, there is an expectation that the numbers will steadily increase.
Sydney - Suburb by Suburb Basis
Top auctioneer in Sydney, Leon Axford from Axford Auctions is seeing that results are varying quite significantly across Sydney.
“Every area seems to be very different at the moment. Every marketplace seems to be different and there doesn’t seem to be a state-wide trend that I can see.”
“It really comes down to individual property at the moment and it seems so different everywhere we go at the moment.”
The rising clearance rate in Sydney demonstrates that transactions are occurring.
“All the clearance rate is telling us is that properties are transacting. It’s a sign that there’s activity in the marketplace, which is a good thing.”
“People are still making a decision and they are still trading property, but I really can’t get a feel for where prices are going at the moment.”
Mr. Axford says that vendors are still looking to sell properties in the months ahead, but there hasn’t been any real urgency to do so yet.
“We’ve got bookings coming through in June and July, but there is still some hesitation, which there probably shouldn’t be. Because as we’ve seen you can still transact at the moment."
President of REINSW, Leanne Pilkington believes that sentiment is slowly creeping back into the property market in Sydney and across the country.
“It’s really nice to see that buyer confidence coming back into the market. However, we only had 613 properties go up (across Australia) and if you consider we had 2,055 for the same weekend last year, it gives you an idea of how tight the supply is right now.”
“Around half of those auctions actually happened in Sydney, some 319 with a 77.9 per cent clearance rate. What you are seeing is a whole lot of buyer confidence, but just not enough vendors coming onto the market to meet the demand that we actually have.”
Ms. Pilkington says the REINSW is also seeing that the numbers are higher than the same time last year.
“To give you an idea, last week we only had 194 auctions with a 66.9 per cent clearance. Same week last year, there were 707 properties going to auction with a 62.1 per cent clearance rate.”
“We also had 1,089 sales happen throughout the week private treaty. So that’s on top of the auctions that sold,” she said
Melbourne - ‘greenshoots’ are starting to appear
Paul Tzamalis, leading auctioneer at The Auction Company is seeing that there are some positive signs in Melbourne at the moment.
“Greenshoots appear to be coming out in the market place. But there does still appear to be caution out there.”
“The clearance rates are still indicative of people wanting to buy, but there’s a significant shortage of stock at the moment.”
Mr. Tzamalis is seeing that sellers are concerned about potential weakness in prices.
“Volume-wise at the moment, people are still using private sales and things like an expression of interest, or tenders, as a way to protect what could be seen as failure at auction.”
Despite the concerns, interest in public auction continues to grow.
“While we’ve had these restrictions of only 10 people attending auctions, people have still been lining up wanting to attend. We’ve had oversubscription of not only bidders but also people wanting to be there and watch and engage. People want to get back to some degree of normality," said Mr. Tzamalis.
REIV CEO GIL King says the top end suburbs continue to see strong buyer demand.
“The top 3 suburbs with the highest reported auctions had sold all listings. Doreen leads with all 7 properties sold under the hammer. Caulfield North and Pascoe Vale follows, each with 4 homes.”
“Last week, auctions held in Melbourne’s middle ring sold 93 per cent from 40 reported auctions, higher than the state average of 82 per cent.”
Mr. King is confident that auction activity will increase as Victoria continues to ease restrictions.
“The weekly clearance rates recorded by REIV have stayed above 70 per cent since the public restrictions were introduced as they continue to strengthen in May.”
“A luxurious residence situated by the bay was sold for $1,900,000 on 1/55 The Esplanade, Drumcondra. This marks the suburb’s most expensive home sold through auction. There were only 6 reported auctions in regional Victoria but with a 100 per cent clearance rate,” said the REIV CEO.