• Thu. Feb 29th, 2024

    Australian Auction Market Sees Strong Start Amid Economic Factors

    ByNuala Hafner

    Feb 5, 2024
    Australian Auction Market Sees Strong Start Amid Economic Factors

    The Australian auction market has kicked off the year with great momentum, driven by easing inflation and the possibility of an earlier than expected rate cut. Vendor hopes and buyer appetites for an unconditional sale have been buoyed by these factors, leading to a strong start to the auction season.

    According to CoreLogic Australia, there were 1,671 auctions tracked last week, making it the second busiest start to the auction season on record. The preliminary clearance rate stood at 73.9%, the highest since August 2022, indicating a significant improvement compared to the end of 2023 when final clearance rates were below 60%.

    Major cities like Melbourne, Sydney, Adelaide, and Canberra recorded preliminary clearance rates above 70%, with Brisbane not far behind at 68.5%. Sydney’s sub-regions performed exceptionally well, with five areas achieving a clearance rate above 80%, including the Northern Beaches, Eastern Suburbs, Sutherland, Inner West, and South West. Melbourne’s North East and Mornington Peninsula also saw early clearance rates exceeding 80%.

    A recent review by CoreLogic highlights that 96,177 homes were auctioned in the combined capitals in 2023, marking an 8.0% decrease from the previous year. However, the clearance rate for 2023 improved to 64.9% from 61.2% in 2022.

    CoreLogic Economist Kaytlin Ezzy believes that this year has started with a significant change in the auction market compared to the soft start experienced in 2023. The mismatch between supply and demand, along with the normalization of buyer demand after the market found stability, contributed to the upward trend in clearance rates. Despite multiple rate hikes in the first half of 2023, auction activity witnessed an unexpected lift in Q3, potentially driven by prospective vendors aiming to beat the rush before the spring selling season.

    While the lower than expected inflation reading and the prospect of early rate cuts have boosted sentiment, it remains to be seen whether this strong start is merely early year exuberance or a sustainable trend. The coming weeks will provide further guidance on the market’s trajectory.

    Overall, the Australian auction market is off to an impressive start, benefiting from a range of economic factors and high buyer interest. The industry remains optimistic about the year ahead, with expectations of continued growth and improved market conditions.

    FAQ Section:

    Q: How has the Australian auction market started off the year?
    A: The Australian auction market has started the year with great momentum, driven by easing inflation and the possibility of an earlier than expected rate cut.

    Q: How many auctions were tracked last week?
    A: According to CoreLogic Australia, there were 1,671 auctions tracked last week.

    Q: What was the preliminary clearance rate?
    A: The preliminary clearance rate stood at 73.9%.

    Q: Which major cities recorded high clearance rates?
    A: Melbourne, Sydney, Adelaide, and Canberra recorded preliminary clearance rates above 70%.

    Q: Which sub-regions in Sydney performed exceptionally well?
    A: The Northern Beaches, Eastern Suburbs, Sutherland, Inner West, and South West areas in Sydney achieved clearance rates above 80%.

    Q: How many homes were auctioned in the combined capitals in 2023?
    A: A total of 96,177 homes were auctioned in the combined capitals in 2023.

    Q: What was the clearance rate for 2023?
    A: The clearance rate for 2023 improved to 64.9% from 61.2% in 2022.

    Q: What factors contributed to the upward trend in clearance rates?
    A: The mismatch between supply and demand, along with the normalization of buyer demand after the market found stability, contributed to the upward trend in clearance rates.

    Q: What is the sentiment regarding the strong start of the auction market?
    A: While the lower than expected inflation reading and the prospect of early rate cuts have boosted sentiment, it remains to be seen whether this strong start is merely early year exuberance or a sustainable trend.

    Q: What can be expected for the Australian auction market in the coming weeks?
    A: The coming weeks will provide further guidance on the market’s trajectory.

    Q: What is the overall outlook for the Australian auction market?
    A: The Australian auction market is off to an impressive start, benefiting from a range of economic factors and high buyer interest. The industry remains optimistic about the year ahead, with expectations of continued growth and improved market conditions.

    Definitions:

    – Clearance rate: The percentage of properties successfully sold at an auction.

    – Vendor: The person or entity selling a property.

    – Auction season: The period during which a large number of auctions take place.

    – Rate cut: A reduction in interest rates by the central bank.

    – Preliminary clearance rate: The initial assessment of the percentage of properties sold at auctions, subject to final confirmation.

    – Soft start: A slow or weak beginning to a market or period.

    – Supply and demand: The relationship between the availability of a product or service and consumer interest in purchasing it.

    – Rate hikes: Increases in interest rates by the central bank.

    – Spring selling season: A period, usually in spring, when there is traditionally higher activity in the housing market.

    Suggested related links to the main domain:

    CoreLogic Australia