Auction Action Surges. It indicates recovery from a property slump. In a positive development signaling the property market recovery, auction clearance rates saw a significant boost of 13% this week. There is an impressive 75.3% of capital city property listings successfully sold under the hammer, as per the latest data from CoreLogic.
Last week witnessed a total of 1,912 auctions across the combined capitals, surpassing the previous week’s count of 1,692. This marks the third consecutive week in which the combined capitals achieved a clearance rate above 70%, reaching its highest preliminary clearance rate since February 2022. In comparison, during the same period last year, only 61.3% of auctions held were successful.
Duane Kaak, a research analyst at CoreLogic, highlighted the surge in auction activity, stating, “This week, Sydney recorded 762 auctions, reflecting a 17.2% increase compared to the previous week and a substantial 43.2% rise compared to the same week last year.”
Meanwhile, Melbourne, Australia’s second-largest city, witnessed 834 auctions this week, indicating a 12.1% rise from the previous week. Kaak further added, “With 696 auction results collected so far, Melbourne has maintained a preliminary clearance rate above 70% for the sixth consecutive week, reaching an impressive 74.4%.”
However, not all segments of the property market are experiencing the same upturn in demand. CoreLogic’s quarterly Regional Market Update revealed a downturn in the regional areas that experienced a boom during pandemic lockdowns.
Conclusion
According to Kaytlin Ezzy, an economist at CoreLogic Australia, regions such as Richmond-Tweed, the Southern Highlands and Shoalhaven, and Illawarra witnessed the largest annual declines in house values at -24.2%, -16.0%, and -13.7% respectively.
Ezzy explained, “These markets were among the major beneficiaries of regional migration during the COVID-induced upswing and, as a result, have become increasingly sensitive to the rising cost of debt and the normalization of regional migration trends.”
While these declines may appear significant, they often pale in comparison to the price surge experienced during the pandemic. For instance, house values in Richmond-Tweed, located on the NSW far north coast, skyrocketed by 51% during the lockdown period.
