Auction clearance rates slump as listings swamp buyers

Auction clearance rates have plummeted by 21 percentage points to 63.4 per cent nationwide since the peak in early October, as the surge in listings swamped the dwindling number of buyers, preliminary results from CoreLogic show.

The clearance rate in Sydney has slumped by 21.6 percentage points to 60.8 per cent and was down by 24.7 percentage points to 62.3 per cent in Melbourne.

When the final numbers are tallied, Sydney’s clearance rate is likely to fall below 60 per cent for the first time this year.

A total of 4,756 homes were taken to auction across the combined capital cities this week, the second busiest auction week since CoreLogic records began in 2008.

This is also the fourth consecutive week when more than 4,000 capital city homes have been taken to auction, something that has never been seen before, said Tim Lawless, CoreLogic’s research director.

“I think it reflects the fact that sellers are really rushing to take advantage of the strong selling conditions before the end of the year,” he said.

“It really shows that the selling environment is changing quite rapidly from a market that was substantially under-supplied to one that’s now virtually normalised and even moving to above average levels for total listing numbers.

“This is great news for buyers who now have more options available, and that’s reflected in the clearance rates which have now returned to the long-term averages of around the low to mid-60 per cent range.”

SQM Research managing director Louis Christopher said auction volumes on the weekend were the highest ever recorded on any weekend before Christmas.

“We’ve recorded 1031 homes scheduled for auction in Sydney, 1599 in Melbourne and 3920 nationally – which are unprecedented this late in the season,” he said.

“Demand tends to drop around this time, so it’s not surprising to see falling clearance rates, but I think given the huge volumes coming through, buyers have been swamped with choice.”

Only 376 properties out of the 1315 collected results in Sydney were sold under the hammer, while 407 were sold prior, 191 were passed in and 325 were withdrawn.

In Melbourne, 662 homes out of the early results of 1778 were sold at auction, while 419 were sold prior, 417 were passed in and 254 were withdrawn.