Australia’s Residential Auction Market Records Busiest Period Despite Pandemic
Despite the Coronavirus pandemic and the resulting lockdowns, the Australian residential auction market records its busiest period since 2017. For June 2021 quarter alone, 31,605 homes were auctioned in the capital cities of Australia. It is not surprising that the residential auction market was not as busy during the same quarter last year.
These numbers make it the busiest period for home auctions in Australia since December 2017, when 32,408 homes were auctioned across the capital cities.
There were 19,004 auctioned homes in the first quarter of March 2021. The increase in the auction home market activities reflects the recovering and strong housing market conditions in the country despite the global pandemic.
Amidst the height of the COVID-19 pandemic, with restrictions in place, the capital cities of Australia only saw 13,783 home auctions during the same quarter.
A Decrease in Clearance Rate
The combined capital clearance rate for June 2021 is 75.7%, which is way above the historic average of 63.5%. There is also a 6.2% increase in dwelling values across the capital cities.
However, despite the increase in activity, there has been a decrease in the clearance rate since March 2021. During the first quarter, 80% of the auctioned properties were sold. This high clearance rate resulted from record-low mortgage rates, rising economic conditions, and a low volume in the houses put on sale. There was a sense of scarcity as the house listings remained low across the country.
While the number of homes put on auction increased for the June 2021 quarter, the rate of successful auctions decreased. This is because houses are not as affordable, resulting in a loss of momentum for the housing market.
Quarterly Auction Statistics Per City
Sydney had a clearance rate of 78.4% for the June 2021 quarter. It recorded 12,780 home auctions. It is significantly higher compared to the March 2021 quarter, which saw 7,043 home auctions.
However, it should be noted that 14 out of 15 of Sydney’s sub-regions had a lower clearance rate compared to the March 2021 quarter. Four of Sydney’s subregions had over 80% clearance rates, while way back in March 2021, 13 subregions had.
Melbourne listed a total of 13,693 home auctions for the quarter of June 2021 and a clearance rate of 73.3%. The number of homes sent for auction is higher compared to the previous period, which recorded 9,065. It is also higher compared to last year’s 5,369.
All Melbourne subregions experienced an increase in the volume of homes sent to auction. The city’s Inner region recorded 2,614 home auctions, followed by the Inner South with 1,865 home auctions.
Canberra recorded the highest clearance rate among Australia’s capital cities for June 2021. With 1,194 total home auctions, the city had a clearance rate of 88.3%.
The low mortgage rates in the city, as well as its tight labour market and low listing volumes, resulted in high demand for housing.
Brisbane saw a total of 1,896 home auctions with a clearance rate of 69.6%.
Adelaide had a clearance rate of 76.7% for the June 2021 quarter. A total of 1,737 home auctions were recorded during the said period.
Perth has listed a total of 273 home auctions for June 2021. It recorded a clearance rate of 53.5%.
Tasmania, with a total home auction of 32, had a 71.9% clearance rate.
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