Auctions on the rise

The number of auctions held across Australia has increased consistently since the first week of August when just 817 auctions were held. The last week of September and first week of October saw a slight reduction in auction volumes due to Grand Final season, however the number of auctions scheduled for this weekend is set to be one of the largest, with 1,670 auctions scheduled.

As auction volumes have ramped up, so too have auction clearance rates. The national weighted average has been above 70% for the last 15 weeks.

Auction clearance rates are often used as a timely barometer of real estate market sentiment. When clearance rates are high we can assume that there is a healthy level of optimism among buyers and that vendor expectations about the value of their property is aligned with buyer expectations. On the flipside, when clearance rates are low we can generally infer that home buyers are more cautious and vendor expectations may not be aligned with market conditions.

Clearance rates have more relativity to some markets than others. Arguably, they are most relevant to the Melbourne and Sydney market where 85% of the nation’s auctions are held each week. In Brisbane, auctions account for just over 7% of all auctions nationally, followed by Adelaide at 4%, Canberra at 2.7% and Perth at 1.6%. Tasmania and the Northern Territory account for less than 1% of the overall auction market.

RP Data calculates clearance rates based on the ratio of