Melbourne and Sydney auctions see skyrocketing prices and high clearance rates

author-avatar By on April 07, 2021
Melbourne and Sydney auctions see skyrocketing prices and high clearance rates

New data reveals auction clearance rates in Sydney and Melbourne have reached their highest level in years during the current property boom.

The Domain Auction Report Cards for Sydney and Melbourne shows Australia's two biggest cities hit their highest clearance rates since 2015 and 2017 respectively, while the number of auctions scheduled in Sydney during March was the highest ever recorded. 

clearance rate is a key property market indicator, expressed as a percentage of the number of properties sold at auction: Sydney's clearance rate in March was 82.3% of properties while Melbourne's was 74.8%. 

These numbers follow other recent data from CoreLogic, which revealed Sydney and Melbourne's median property values rose by 6.7% and 4.9% in just three months to lead national property prices to the steepest monthly spike in 32 years. 


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.

In Sydney, March's clearance rate was 28.3 percentage points higher compared to March 2020 (when the clearance rate was only 54%), and in Melbourne the increase was 24.6 percentage points higher (up from 50.1% in March 2020). 

According to Domain's senior research analyst Dr Nicola Powell, Sydney has now seen its longest run of strong clearance rates since 2015, when rates held above 80% for 20 Saturdays in a row.

"Clearance rates have been gaining momentum since May 2020, post-lockdown, and this demand has continued to follow through to March 2021," Dr Powell said of Sydney's results. 

"With auction clearance rates holding firm above 80% on high auction numbers, the Sydney property market is expected to continue to remain competitive throughout late autumn and could provide unseasonable winter conditions. Buyer appetite remains even when tested on higher volumes of scheduled auctions.

"For buyers, the combination of low mortgage rates, high household saving rates and relaxed serviceability assessment has allowed buyers to take advantage of higher price expectations."

Related: Sydney, Hobart 'unaffordable' for almost half of first home buyers.

Auction conditions were strongest for houses in Sydney, with 84.2% sold under the hammer last month compared to 77.5% of units, Dr Powell said.

In Melbourne, 76.6% of houses at auction were sold compared to 69.3% of units. 

"The lift in market sentiment has started to encourage sellers to market, with auction listings rising," she said.

Sydney Auction Results: March 2021 Clearance Rates
Houses 84.2%
Units 77.5%
Combined 82.3%

Melbourne Auction Results: March 2021 Clearance Rate
Houses 76.6%
Units 69.3%
Combined 74.8%

Data via Domain. 

Auction sale prices soar in Sydney and Melbourne 

With demand at auctions sky-high - Domain reported a 7% increase in the number of sellers accepting offers before the auction was even held - prices too are surging as a result. 

The median auction price for Sydney jumped 16.9% over 12 months to $1.755 million; For Melbourne houses, prices jumped 17.9% over the year to $1.15 million.

Both of these are well above the median values overall reported by CoreLogic ($928,028 for Sydney and $736,620 for Melbourne). 

Sydney and Melbourne units also broke new ground, breaching the $1 million and $700,000 marks when sold at auction for the first time respectively.

"Not all homes are sold at auction, and others available for private sale may not command such high asking prices. But homes are often taken to auction when a real estate agent expects competition from at least two potential buyers, suggesting homes sold at auction are often highly sought-after," Dr Powell wrote. 

Related: Top 10 most affordable regional property markets.

Other capitals see record prices too 

It wasn't just Sydney and Melbourne sellers seeing dollar signs at auctions in March. 

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%, while Canberra (12.2%) and Adelaide (10.9%) also posted positive results. 

archauc01Source: Archistar

The median sale prices are a stark contrast to median dwelling values as reported by CoreLogic, with the median value of Brisbane homes ($535,618) less than half the median auction price ($1,099,750). 

Yet Archistar chief economist Dr Andrew Wilson believes auction prices have not yet peaked. 

"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." 


Photo via Samuel Mann on flickr

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): 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 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.

Latest Articles

author-avatar
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.

Get free insights & tips monthly

By subscribing you agree to the Savings Privacy Policy

Loading data please wait...

{{returnData.productName}}

Overview

Current Rate

{{returnData.currentRate | percentage:2}}

Comparison Rate*

{{returnData.comparisonRate | percentage:2}}

Rate Type

{{returnData.rateType}}

Advertised Rate

{{returnData.advertisedInterestRate}}

Comparison Rate*

{{returnData.comparisonRate}}

Monthly Repayment

{{returnData.monthlyRepayment}}

Interest Type

{{returnData.interestType}}

Total Interest Rate

{{returnData.totalInterestRate | percentage:2}}

Base Interest Rate

{{returnData.baseInterestRate | percentage:2}}

Bonus Interest Rate

{{returnData.bonusInterestRate | percentage:2}}

Total Interest Rate

{{returnData.totalInterestRate | percentage:2}}

Introductory Rate

{{returnData.introductoryRate | percentage:2}}

Introductory Term

{{returnData.introductoryTerm}}

Base Interest Rate

{{returnData.baseInterestRate | percentage:2}}

Term

{{returnData.term}}

Advertised Interest Rate

{{returnData.advertisedInterestRate | percentage:2}}

Interest Frequency

{{returnData.interestFrequency}}


Fees and Features

Ongoing Annualised Fee

{{returnData.annualFee}}

Upfront Fee

{{returnData.upfrontFee}}

Offset Account

Redraw

Principal & Interest

Interest Only

N/A{{returnData.interestOnly}}

Max loan to value ratio (LVR)

{{returnData.maxLVR | percentage:0}}

Lump sum repayments

N/A

Additional repayments

Maximum Loan Term

{{returnData.maximumLoanTerm}}

Upfront Fee

${{returnData.upfrontFee}}

Ongoing Monthly Fee

{{returnData.ongoingFees}}

Early Repayment Fee Applies

N/A

Vehicle Types

{{returnData.vehicleType}}

Maximum Vehicle Age

{{returnData.maximumVehicleAge}}

Pre Approval Available

N/A

Online Application

N/A

Account Keeping Fee

{{returnData.accountKeepingFee}}

Minimum Monthly Deposit

{{returnData.minMonthlyDeposit}}

Linked Account Required

N/A

Interest Calculated

{{returnData.interestCalculated}}

Interest Paid

{{returnData.interestPaid}}

Online Application

N/A

ATM

N/A

EFTPOS

N/A

Account Keeping Fee

{{returnData.accountKeepingFee}}

Minimum Monthly Deposit

{{returnData.minMonthlyDeposit}}

Linked Account Required

N/A

Interest Calculated

{{returnData.interestCalculated}}

Interest Paid

{{returnData.interestPaid}}

Online Application

N/A

ATM

N/A

EFTPOS

N/A

Minimum Deposit

{{returnData.minDeposit | currency : '$' : 0}}

Upfront Fees

{{returnData.upfrontFee | currency : '$' : 0}}

Annual Fees

{{returnData.annualFee | currency : '$' : 0}}

Notice Period to Withdraw

{{returnData.noticePeriodToWithdraw}}

Online Application

N/A

Automatic Rollover

N/A

Maturity Alert

N/A