Auction market bounce’s back after interest rate hold in July 2023

In the dynamic landscape of the Australian housing market, recent developments have piqued the interest of industry experts and prospective buyers alike. With the Reserve Bank of Australia (RBA) maintaining the official cash rate on hold for July 2023 at 4.10% and a scarcity of available homes, this weeks (02 JULY 2023 to 08 JULY 2023) auction clearance rate has witnessed a notable surge, reaching its highest point in five weeks, according to data from CoreLogic.

This Weeks Analysis

During this week, a total of 1,418 properties were successfully sold across the capital cities. This figure represents an 8.1% decrease in auction volumes compared to the previous weekend, and a 12.9% decline when compared to the corresponding period last year.

After experiencing a temporary dip in clearance rates last weekend, the combined capital’s preliminary clearance rate rebounded impressively to 74.5%. With a total of 1,066 results collected thus far, this weekend’s preliminary clearance rate marks a 4.2% increase from the previous weekend and a significant 19.4% rise from the final rate recorded at this time last year when only 55.1% of capital city auctions resulted in a successful sale.

In Sydney NSW, the financial hub of Australia, 564 properties were brought to auction, demonstrating a decline from the previous weekend’s figure of 676 and a slight decrease from the same period last year when 605 properties were auctioned. Despite this, the preliminary clearance rate in Sydney witnessed a promising increase of 4.4%. As it stands, 75.6% of the 427 results collected have resulted in a successful sale.

The city of Melbourne in Victoria, witnessed a minor rise in auction numbers, with 564 properties being presented to potential buyers. This figure represents an increase of 14 additional auctions compared to the previous weekend. Melbourne’s preliminary clearance rate also experienced a positive shift, rising by 2.6% to reach 70.2%. Among the 448 results collected, an impressive 72.8% yielded a successful outcome. According to CoreLogic, Melbourne has sustained a preliminary clearance rate above 70% for a remarkable 13 consecutive weeks.

It is worth noting that the clearance rate for the previous weekend was 71.2% (revised to 67.2% at final figures), while the corresponding period last year witnessed a clearance rate of 53.1%. This is a good indication, as Auction market bounce’s back after interest rate hold in July 2023.

Looking ahead, CoreLogic predicts a potential unseasonal upswing of 12% in capital city auction volumes next week, attributed to the conclusion of Victorian school holidays. This surge in activity is expected to further invigorate the Australian housing market, bringing renewed opportunities for buyers and sellers alike.

Conclusion

In conclusion, the recent analysis of the Australian housing market’s auction activity paints a compelling picture. With the RBA’s decision to maintain the official cash rate and a constrained supply of available properties, the market has witnessed a surge in preliminary auction clearance rates. The combined capital cities have experienced a rebound in clearance rates, with Melbourne displaying remarkable consistency above 70% for 13 consecutive weeks. Meanwhile, Sydney has also seen an encouraging increase in clearance rates. As the market continues to evolve, the upcoming weeks hold the promise of heightened auction volumes, presenting both challenges and opportunities for market participants.