Australian auctions off to a strong start as momentum flows into 2022
As lockdown restrictions eased in October and as a result of the strong market conditions through the last quarter of 2021, previously unseen levels of auction activity were recorded across the country in the final three months of the year.
According to CoreLogic’s Auction Market Review, it is reported that 42,918 properties were taken to auction across the combined capitals from October to December 2021, representing an increase of 85.1% from the previous quarter and more than double (109.5%) the December 2020 figures.
Tim Lawless, CoreLogic’s Research Director, stated that the surge in activity was a result of several factors, including some catch-up from the September quarter when the largest auctions markets were weighed down by lockdowns as well as a pickup in activity following the seasonally slower conditions of winter.
“The large number of auctions held through the December quarter also reflects the strong selling conditions that were present, which motivated vendors to capitalise on strong buyer demand and the significant rise in values seen through the pandemic,” he says.
As the CoreLogic data suggests, Australia’s most active auction markets, Melbourne and Sydney had 19,788 and 14,906 auctions for the last quarter of 2021, with 69.7% and 69.9% clearance rates respectively.
Across all combined capitals, the quarter’s clearance rate was 71.3%, representing a slight decrease in the previous quarters’ results at 71.7%.
Despite the decrease in clearance rate across the combined capitals, due to the increased level of volume of auctions being held, the clearance rate trended lower to 61.1% in the week ending 19th December 2021.
According to Tim Lawless, “The higher auction volumes will often correspond with lower clearance rates as demand becomes more thinly stretched.”
When analysing the smaller capitals of Brisbane, Adelaide, and Canberra, all recorded a significant increase in volumes compared to Q3 2021, with Brisbane holding 3,027 auctions with a 74.9% clearance rate, Adelaide holding 2,902 auctions with an 80.5% clearance rate, and Canberra holding 1,949 auctions with an 82.4% clearance rate.
The increased auction volumes in Brisbane and Adelaide mirrored the relative housing strength of the two cities, with prices continuing to grow at cyclical highs through December, leading to a greater proportion of homes being put up for auction. In the week ending on the 23rd January 2022, Brisbane and Adelaide recorded some of the highest auction clearance rates across the country, with 76.12% and 78% clearance rates respectively.
When looking at the auction clearance rates for the week ending 23rd January 2022 nationally, 448 properties were taken to auction, with a preliminary clearance rate of 68.57% according to the CoreLogic Auction Results. As reflected in the data, this represents an increase of more than 40 per cent for the same weekend 12 months prior.
Number of National Auction Listings - January Week 3 Comparison
Much of the momentum experienced in the last quarter of 2021 appears to be pushing over into 2022, with a strong surge in auctions being carried out in January, with many looking to take advantage of the price growth experienced over the past 12 months, with growth up 24.5% nationally, before the potential introduction of increased rates and a rising lack of affordability.
If you would like to discuss the Australian property market in more detail, please reach out to the team to organise a time to have a conversation about how Wealthi can help you build a successful property portfolio.
Chris Hynes is Wealthi’s Global Research Analyst, Based in London