The share of homes selling under the hammer has dropped to its weakest since the first COVID lockdown. Here’s what the auction clearance rate is, and what it’s telling us about house prices.
Property-data firm Cotality, the business formerly known as CoreLogic, says the national auction clearance rate has fallen to its lowest level since April 2020.
The numbers
In the week ending 7 June, the preliminary clearance rate across the capital cities came in at 51.1 per cent. In Cotality’s own words, that was “the lowest outcome since the week ending April 26th, 2020”, the early weeks of the pandemic, when auctions all but stopped.
There were 1,182 homes taken to auction that week, down close to 14 per cent on the same week a year earlier, with volumes also thinned by the King’s Birthday long weekend. Brisbane was the weakest capital at 31.9 per cent, while Sydney (52.9 per cent) and Melbourne (52.3 per cent) sat barely above half.
And the slide has continued. On the most recent weekend, ending 21 June, Cotality’s preliminary reading fell further, to 47.4 per cent. That’s the first time the preliminary rate has dropped below 50 per cent since the pandemic.
What the clearance rate is, and why it matters
Every weekend, thousands of homes, heavily concentrated in Sydney and Melbourne, are sold at auction. The clearance rate is simply the share that sell, whether under the hammer, beforehand or straight after. A home that’s passed in for want of a bid, or pulled before auction day, counts as not cleared.
It matters because it’s the fastest read we get on the property market. It lands every weekend, weeks ahead of the slower price figures and months ahead of official housing data, and it captures the tug-of-war between what buyers will pay and what sellers expect. As a rough guide, a rate above 70 per cent points to a hot market, the mid-60s is balanced, and anything below the high 50s says buyers have the upper hand. A figure in the high 40s is the kind of weakness that tends to travel with falling prices.
One catch in the numbers
The weekend figure is preliminary, and it always gets revised down. As more results are reported over the following days, the final number lands lower, by an average of about 5.5 percentage points over the four weeks to late June. By that maths, Cotality noted, the latest weekend’s 47.4 per cent could finalise in the low 40s.
This isn’t one quiet weekend. Cotality says clearance rates have been easing since late February. Brisbane has been the soft spot, stuck below 50 per cent for weeks.
The final figures for the latest weekend are due midweek.
