Home auction prices soar to record highs with further growth expected

author-avatar By on March 31, 2021
Home auction prices soar to record highs with further growth expected

Homes sold at auction have reached record-breaking prices in March thanks to unprecedented demand for available property.

Property analytics group Archistar found all capital cities recorded sharp increases in the median price of houses sold at auction over the year ending March 2021. 

Brisbane has the highest growth over the year, up by a whopping 29.3%, followed by Sydney (16.4%), Canberra (12.2%), Melbourne (11%), and Adelaide (10.9%). 


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

"Weekend home auction markets as expected have continued to produce boom-time results over March with prices and clearance rates now clearly at record levels," Dr Wilson said.

"Although April is typically a quieter month for auction activity with buyers and sellers distracted by holidays, results will nonetheless likely continue to track at record levels with home prices set to go higher and higher." 

archauc01

Source: Archistar

Sydney reported the highest median price for houses sold at weekend auctions over March at $1,609,375, followed by Brisbane ($1,099,750), and Melbourne ($1,010,750). 

The figures are a stark contrast to median dwelling values, as according to CoreLogic, the median value of Brisbane homes is $535,618, less than half the median auction price. 

In Sydney, the median dwelling value is $895,933, while Melbourne's is $717,767. 

archauc02

Source: Archistar

Dr Wilson said sky-high auction clearance rates off the back of massive buyer demand were also pushing values up. 

"Already high auction clearance rates continued to climb over March with all markets remarkably reporting record-level results," he said. 

"Sydney and Adelaide were the top performers at 90.0% followed closely by Canberra 89.6%, Melbourne 82.0% and Brisbane 81.4%.

"All capitals recorded clearance rates higher than reported over March last year with the growing impact of covid shutdowns influencing results at that time." 

archauc03

Source: Archistar

Busiest week for auctions in three years 

According to CoreLogic, 3,791 homes were taken to auction across the combined capital cities last week, the busiest week for auctions since the end of March 2018. 

In comparison, the week prior saw 2,710 auctions held across the capitals, while the same period last year saw 3,289.

The higher volumes saw the preliminary clearance rate strengthen, with 84.7% of auctions recording a successful result, up from the previous week's clearance rate of 82.0%.

Sydney's final auction clearance rate continued to maintain strength holding above 80% for the past seven weeks, which CoreLogic expected to be no different this week. 

Meanwhile, Melbourne's dwelling values have reached a record high, surpassing their earlier April 2020 peak by 0.2%. 

CoreLogic's executive research director Tim Lawless said it had been a matter of time before the housing market boom saw Melbourne hit a new peak.

“Reflecting what we saw in Sydney earlier this month, Melbourne dwelling values have now surpassed their previous peak to notch up a new record high," Mr Lawless said.

"Following a decline of -6.1% through COVID-19, values have since grown by 6.7%, and are now sitting 0.2% above their recent high recorded by CoreLogic’s hedonic daily home value index on 6 April 2020.”


Photo by Natalie Su 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.

*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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Alex joined Savings.com.au in 2019. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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