The housing market across Australia will be put to the test this weekend with one of the biggest auction week’s taking place since December 2010. There are 2,353 auctions planned to be held this week, with the vast majority scheduled for Saturday, October 27th. There have only been six other occasions since early 2008 where the number of scheduled auctions has been this high.
The last time we recorded an auction market close to this size was over the week ending April 1st, 2012, when housing market conditions were considerably weaker than what they are now. The clearance rate over that week was 49%.
More recently, the weighted average auction clearance rate across the capital cities has been tracking around the 55% mark, with the largest auction market, Melbourne, recording a clearance rate of 60% or higher over three of the past four weeks. [Edit note: Melbourne's clearance rate was revised down to 57.7% for last week. Based on the more recent data, Melbourne's clearance rate was recorded at 60% or higher over three of the past five weeks. See comments section for more details.]
Our other vendor metrics, which include the average number of days it takes to sell a dwelling and the average level of vendor discounting, have also shown an improving trend, suggesting the buyer and seller expectations are starting to find some common ground.
Vendor discounting (the percentage difference between the original listing price of a property and the ultimate selling price) has been consistently improving since July last year. This can probably be attributed to both vendors setting more realistic asking prices for their properties, and buyers losing some leverage in their negotiation position as market conditions show signs of a recovery.
Average selling time has stabilised at around the two month mark, a slight improvement from last year but nothing to write home about. Dwellings were averaging 58 days to sell in August this year and 62 days at the same time last year.
The results from this weekend’s auction market will be closely watched. I’ll update the blog on Sunday with our preliminary results. On Thursday, when we have our final results for the past week, I will update the blog again. (Note: RP Data publishes preliminary auction clearance rates every Monday, based on an average collection rate of about 60% of all auctions. By Thursday of each week we finalise our clearance rates, typically averaging a collection rate between 80% and 90% of all auction’s held.
Weekend update: Auction markets held firm over the weekend with the preliminary weighted average clearance rates across the combined capital cities recorded at 54.6%. Both Melbourne and Sydney recorded a 59% success rate based on the preliminary data.
Thursday update: The final clearance rate last week was 61.5% in Melbourne and 55.6% in Sydney, both solid results. Across the capital cities, the weighted average clearance rate was 54.6%. RP Data collected results for 87% of all Melbourne auctions and 80% of all Sydney auctions; across the capital cities are collection rate was 83%.