Australia’s auction market has kicked off 2024 with vigor, with moderating inflation and the potential for an earlier-than-anticipated rate cut, elevating hopes for vendors and invigorating buyer appetites for unconditional sales.
According to CoreLogic’s latest data, the previous week saw 1,671 auctions, marking the second busiest start to the auction season on record. Notably, the preliminary clearance rate stood at 73.9%, marking the highest since Aug. 20 last year and signaling a significant leap from the end of 2023, which observed final clearance rates dip below 60%.
In key metropolitan areas, Melbourne (71.9%), Sydney (76.3%), Adelaide (77.6%), and Canberra (80.0%) all recorded preliminary clearance rates above 70%, with Brisbane not far behind at 68.5%.
Across Sydney’s sub-regions, five areas exceeded the 80% clearance rate, including the Northern Beaches (82.4%), Eastern Suburbs (82.1%), Sutherland (81.3%), Inner West (80.0%), and South West (80.0%). Similarly, Melbourne’s North East (84.2%) and Mornington Peninsula (82.4%) posted early clearance rates above 80%.
CoreLogic’s 2023 Auction Market Review revealed that 96,177 homes went up for auction across the combined capitals last year, reflecting an 8% decrease from 2022 and marking the lowest annual auction count in three years. The 2023 clearance rate ascended to 64.9%, up 61.2% from the previous year.
CoreLogic economist Kaytlin Ezzy (pictured) remarked on the notable shift in momentum at the outset of this year, contrasting it with the subdued start of the auction season in 2023.
“Contrary to the start of auction season this year, the 2023 auction market had a soft start. The first quarter’s capital city auction numbers fell to levels not seen since the September quarter of 2020, when lockdowns and COVID restrictions hampered auction activity, and remained lacklustre through quarter two,” said Ezzy.
Ezzy noted that despite four rate hikes in the first half of the previous year, Q3 saw a surge in auction activity, followed by a pronounced uptick in Q4. She attributed the unexpected rise in auction volumes during winter to a surplus of prospective vendors aiming to list before the spring selling season, precipitating a market recalibration as negotiating power tilted in favor of buyers, resulting in clearance rates dipping below 60% in the final weeks of December.
Looking ahead, Ezzy speculated that the recent lower-than-anticipated inflation reading and the prospect of early rate cuts might already be bolstering sentiment in the market.
“The next few weeks should provide further guidance on whether this strong result is simply some early year exuberance or a trend that can persist,” she said.
Melbourne emerged as the busiest auction market, with 41,302 homes auctioned, though registering a 7.4% decline from the previous year. Sydney, on the other hand, saw the smallest drop in annual auction activity and the most substantial improvement in annual clearance rates, with 36,844 homes auctioned and a clearance rate of 66.9%.
Among the smaller auction capitals, Brisbane led the pack with 6,831 homes auctioned, followed by Adelaide and Canberra. Adelaide retained the highest clearance rate for the second consecutive year at 73.9%, followed by Brisbane (58.7%) and Canberra (55.6%).
In Perth, 661 homes went under the hammer in 2023, with 45.7% achieving successful sales, while Tasmania witnessed 24 of the 81 homes successfully sold at auction.
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