Property sellers started to align with buyers’ expectations in terms of auction pricing, as indicated by the improved take-up over the first quarter of the year.
Domain’s Quarterly Auction Report showed that clearance rates increased to 65.6% across capital cities and 50.7% in regional areas.
Clearance rates reached the highest level in thirteen months across the capital cities and a twelve-month high in regional markets.
| Location | Clearance rate | Monthly change | Annual change | Auction volume | Sold at auction | Passed in | Sold prior | Withdrawn |
|---|---|---|---|---|---|---|---|---|
| Combined Capitals | 65.6% | 3.5ppt | 2.1ppt | 7,723 | 4,511 | – | – | 12.5% |
| Combined Regionals | 50.7% | 5.9ppt | -2ppt | 1,324 | 434 | 276 | 18.9% | 17.1% |
| Sydney | 67.1% | 1.6ppt | 4.4ppt | 3,142 | 1,912 | 458 | 31.8% | 16.8% |
| Melbourne | 66.4% | 4.8ppt | 1.9ppt | 3,254 | 2,007 | 704 | 18.8% | 10.4% |
| Brisbane | 52.1% | 2.5ppt | -1.2ppt | 462 | 162 | 127 | 17.0% | 7.1% |
| Adelaide | 71.0% | 2.8ppt | 0.3ppt | 453 | 267 | 92 | 11.4% | 4.5% |
| Canberra | 54.1% | -2.8ppt | -18.8ppt | 347 | 157 | 112 | 17.6% | 7.2% |
| Perth | – | – | – | 51 | 3 | – | – | – |
| Hobart | – | – | – | 3 | 1 | – | – | – |
| Darwin | – | – | – | 11 | 2 | 1 | – | – |
Domain chief of research and economics Dr Nicola Powell said the increase in clearance rates reflect the willingness of sellers to adapt their pricing to align with current buyer expectations amid rising interest rates and deteriorating mortgage affordability and borrowing capacity.
“Fewer homes going under the hammer have also supported better auction outcomes. It reflects buyers are willing to place favourable auction offers when the choice remains poor,” she said.
Looking at the share of properties sold prior to auction, there seemed to be a continued increase particularly in capital cities, which reported the highest share since March 2022.
In fact, across the country, the number of properties sold before auction day has risen for the second consecutive month.
“Similar to last month, sellers are more inclined to accept offers before auction day due to subdued demand. However, these conditions could start to be reshaped as the prospects of an interest rate pause and a glimmer of a lower cash rate later this year or early in 2024 uplift sentiment,” Dr Powell said.
In terms of property types, it appears more buyers are going after units — over the month, units continued to post higher take-up rates that houses.
“Affordability, perceived value, and lower borrowing capacity help support as units persistently outperform houses at auction,” Dr Powell said.
| Location | Houses | Units | ||||
| Clearance rate | Monthly change | Annual change | Clearance rate | Monthly change | Annual change | |
| Combined Capitals | 65.4% | 4.3ppt | 0.2ppt | 66.3% | 0.8ppt | 7.9ppt |
| Combined Regionals | 49.1% | 5.0ppt | -3.7ppt | 63.0% | 14.4ppt | 11.1ppt |
| Sydney | 67.3% | 2.8ppt | 2.3ppt | 66.6% | -1.6ppt | 8.8ppt |
| Melbourne | 66.2% | 5.2ppt | 0ppt | 66.9% | 3.5ppt | 8.3ppt |
| Brisbane | 50.9% | 3.9ppt | -1.1ppt | 58.7% | -8ppt | -1.5ppt |
| Adelaide | 70.3% | 1.4ppt | -1.8ppt | 80.8% | 28.1ppt | 27.1ppt |
| Canberra | 54.0% | -2.4ppt | -19.9ppt | 54.9% | -4.8ppt | -14.2ppt |
On an annual basis, median auction prices declined across the board.
Here are the other highlights of the March 2023 Domain Auction Report:
- Sydney’s clearance rate hit the second consecutive month of increase, reaching the highest level since October 2021.
- Among all capital cities, Melbourne reported the steepest monthly increase in clearance rates.
- Brisbane managed to break the 50% mark in clearance rates for the first time since May 2022.
- Adelaide outperformed all capital cities, posting its best clearance rates since February 2022.
- Of all capital cities, only Canberra reported a decline in clearance rates over the month.
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Photo by kanchanachitkhamma on Canva.
Table Sources: Domain
