Auctions at their highest level 'since records began'

author-avatar By on June 04, 2021
Auctions at their highest level 'since records began'

Major cities are seeing the highest number of auctions and the highest clearance rates in more than two decades of records.

That's according to Domain's latest Auction Report for May 2021, which found that Sydney, Melbourne and Adelaide saw the largest number of auctions scheduled in a single month since Domain first started keeping records. 

Those records extend back to 1995 in NSW, 1997 in Victoria, and 2002 in South Australia.

Clearance rates - the percentage of successful auctions - also hit a new record of 90% in Canberra, and Brisbane's clearance rate of 67.2% is still the third highest ever recorded there. 

Sydney saw 3,956 properties sold at auction; Melbourne more than 4,000; Brisbane 362; and Adelaide and Canberra recorded 462 and 327 sold properties. 

City Clearance Rate Auctions Scheduled Auction Sold Passed In Sold Prior Withdrawn
Sydney 77.3% 5486 3956 485 34.5% 13.2%
Melbourne 72.2% 6112 4040 856 23.4% 12.6%
Brisbane 67.2% 688 362 134 27.1% 8%
Adelaide 76.2% 723 462 100 23.6% 7.3%
Canberra 89.8% 400 327 25 22.8% 3.3%

Source: Domain.

Geographies are based on ABS GCCSA geography. Auction reporting rates are above 91% across all capitals apart from Brisbane at 78% and Adelaide at 83%.

Auctions typically represent around 10% of all property sales in Australia, and they have been red hot lately. 

In April, research by property AI firm Archistar already showed 2021 is seeing record numbers of auctions, and prices too were also starting to hit records. 

Dr Andrew Wilson, chief economist at Archistar, said in March it was "unlikely we had yet reached the peak of auction prices". 

“Auction clearance rates have climbed to unprecedented levels over [March 2021] in most capitals reflecting unprecedented buyer competition for available property," he said. 

“Clearance rates are likely to remain high with the market constraints of recent years now released and surging buyer demand seemingly yet to be satisfied."

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Source: Archistar

See also: House price boom continues as values rise 2.2% in May

In its Auction Preview for this Saturday (5 June), Domain said this weekend will be the busiest for auctions since then. 

"There are 2,616 scheduled auctions across Sydney, Melbourne, Brisbane, Adelaide and Canberra this Saturday, making it the second busiest auction weekend of the year," Domain's Dr Nicola Powell and Dr Henry Yu said. 

"Auction volumes have been steadily rising, with 6.1% more auctions compared to last Saturday. Of the scheduled auctions, 39% are in Sydney and 50% are in Melbourne. 

"Despite a slight easing of restrictions, onsite auctions are still deemed non-essential by the Victorian government. Virtual auctions continue to act as the only alternative available for the auctions to take place this coming Saturday."


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.

Houses continue to outperform units 

Houses are still the key driver behind recent auction success in terms of both clearance rates and prices. 

According to Domain, house clearance rates outperformed units in every capital city, although unit clearance rates are still strong. 

In Sydney for example, house and unit clearance rates in May were 78.2% and 75% respectively. 

According to Dr Powell, the difference between house and unit clearance rates does appear to be narrowing.

"The house-unit clearance rate difference grew from around 3% in mid-2020, peaked at 12.7% in November 2020 and has gradually returned back to around 3% in May," she said. 

"The reduced difference is likely to be associated with increased investor and first-home-buyer participation, or overall affordability bottlenecks associated with trying to purchase a house in Sydney.

"For houses and units, this month’s clearance rate is the strongest May result in six years."

Auction results May - houses 

City Clearance Rate Sold Prior Withdrawn Median Price
Sydney 78.2% 30.8% 11.9% $1,783,500
Melbourne 73.7% 22.5% 11.3% $1,150,000
Brisbane 68% 27.6% 7.6% $1,080,000
Adelaide 76.7% 23.4% 6.3% $740,500
Canberra 91% 22.6% 2% $978,000

Auction results May - units 

City Clearance Rate Sold Prior Withdrawn Median Price
Sydney 75% 44.1% 16.5% $1,010,000
Melbourne 67% 26.6% 16.6% $706,000
Brisbane 59.2% 22.4% 12.2% $529,000
Adelaide 67.6% 26.5% 23.5% $467,000
Canberra 84.1% 23.8% 9.5% $650,000

Data provided by Domain. 

Photo by Thomas Chan on Unsplash

Disclaimers

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 2020. They are (in descending order): Great Southern Bank, 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 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

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, Performance Drive 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.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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