Australia’s auction markets sustained the momentum they started last year, reporting the busiest first quarter on record.
According to CoreLogic, 23,748 homes went under the hammer in the first three months of 2022, the highest volume for March quarter since records started in 2008.
This volume was significantly higher than the 19,004 auctions during the same period in 2021 and the 18,902 auctions in 2020.
The March 2022 quarter followed the strong showing during the last three months of 2021, which witnessed auction volumes reach 42,918.
CoreLogic Research Director Tim Lawless said it is crucial to understand the dynamics between the number of homes being listed for auction and the actual turn-out during the auction day.
“The first quarter of the year saw the trend in auction volumes and clearance rates heading in different directions,” Mr Lawless said.
“While the number of auctions held reached a March quarter high, the clearance rate gradually drifted lower through the quarter.”
In fact, the combined capital city clearance rate of 69.9% for the first quarter of the year was down from the 71.3% success rate over the previous quarter and the 80% rate achieved during the same period last year.
This, however, is a “fairly normal trend” as demand becomes more thinly stretched when auction volume goes up.
Sydney and Melbourne had the biggest impact on this trend — both cities are reporting high auction volumes and declining auction clearance rates.
For instance, Sydney hosted 8,283 auctions during the quarter, but only reported a 69.1% clearance rate. The success rate was lower than the 84.5% achieved in March 2021.
Mr Lawless said smaller auction markets were generally stronger during the quarter, particularly Adelaide where clearance rates held above 80%.
“With such strong selling conditions, we’ve seen a progressively larger portion of homes being taken to auction in Adelaide; a city that has historically favoured sales campaigns by private treaty rather than auctions,” he said.
Interestingly, auction markets also posted their busiest Easter week period this year after reporting a total listing of 937 across combined capital cities.
However, Mr Lawless predicts that the next few months might be slow for auction markets.
“This is a seasonal trend we see through the winter months, but as selling conditions gradually swing towards a buyer’s market, we could also see clearance rates trending lower,” he said.
Photo by @sora-shimazaki on Pexels.
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