About 40% of scheduled auctions were canned over the weekend as the property market adapts to new social distancing measures.
It was set to be the busiest time of the year for auctions, with over 3,200 homes scheduled to go under the hammer over the weekend according to CoreLogic.
But new social distancing measures introduced by the Morrison Government last week, including a public ban on auctions and open homes, saw 40% of those pulled from the market.
The preliminary auction clearance rate dropped to 51.4% - the lowest level since June 2019.
Last week, the clearance rate was 56.9% across 2,599 auctions.
"The surge in withdrawn auctions was anticipated, considering the rising level of uncertainty from both buyers and sellers, coupled with the shift towards remote auctions which may take some time for the market to adjust to," CoreLogic said.
"Considering the rapid transition to on-line auction formats, some agents reported technical challenges and connectivity issues; no doubt many of these challenges will be resolved with the benefit of more time to prepare.
"Additionally, the number of auction results collected are lower than usual this week as we seek to confirm the status of scheduled auctions, however, as remaining results are collected we expect the number of withdrawn auctions to rise and the final clearance rate to adjust lower."
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CoreLogic said there had been a surge in the number of properties sold prior to auction, lifting from 22% last week to 36% this week.
"There are likely to be a range of reasons for more auctions selling prior to the scheduled date, including auctions that were brought forward to beat the ban and vendors motivated to offload their property before lockdown policies potentially escalate."
Looking forward, CoreLogic expects there will be "substantially fewer auctions than normal" and less property listings as social distancing measures become stricter due to the pandemic.
"Some vendors will choose to convert their listing to a private treaty method, while others will likely pull their property from the market altogether until confidence and selling conditions improve," CoreLogic said.
"While the preliminary result this week is not overly surprising given the restrictions were only just announced on Tuesday banning in-room and on-site auctions, once agents have time to adjust it will be interesting to see whether methods such as online or over the phone solutions can become a successful replacement whilst the social restrictions are in place.
"Overall, we are expecting a substantial drop in new property listings, regardless of the selling method, as buyers and sellers retreat to the sidelines and wait for some certainty to return to their decision making."
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.
In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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