Auction clearance rates dived over the weekend, but they’re still higher than the lead up to the federal elections last year as buyers work to snap up homes in case owners take them off the market.
Experts believe this past weekend marks “a turning point in buyer and seller sentiment”, with less homes expected to be made available for sale as the country works to flatten the curve in the spread of the COVID-19 virus.
The CoreLogic Property Market Indicator found withdrawal rates of homes were rising “as vendors think twice about testing the market and buyers losing confidence or choosing to avoid public gatherings”.
Before that the withdrawal rate of homes going to auction was 5 per cent, according to CoreLogic, with that rising to just over 8 per cent on Sunday.
It comes just as the market was ramping up, when the past weekend seeing the second highest number of properties up for auction so far this year with 2,539 homes going under the hammer.
REA Group chief economist Nerida Conisbee said despite the current uncertainty, the number of auctions in Melbourne and Sydney remained high.
“Clearance rates aren’t always the best indicator of the market as they primarily reflect the top end of the market in Melbourne and Sydney. However, as we continue to wait for solid search activity trends and pricing data to provide an insight into how Australian property is faring amidst COVID-19, clearance rates are the best gauge on buyer confidence.”
Brisbane’s auction clearance rate over the past week was 34.9 per cent, which was still higher than the same time last year when it sat at 28.2 per cent, according to CoreLogic. Brisbane had 105 homes go under the hammer, with 63 results in the preliminary figures.
Sydney cleared 64.4 per cent at auction, with 680 results in preliminary figures, while Melbourne cleared 62.7 per cent of 1,045 properties that went under the hammer, preliminary figures show.
Preliminary results show an auction clearance rate of 61.3 per cent, which CoreLogic said was “still substantially higher than a year ago when values were falling, but well down on the recent highs”.
That figure was expected to fall further to fall below 60 per cent in final results, which would be a first since mid last year, it said.
But even then, the result would most likely be stronger than the same time last year when the auction clearance rate across the combined capitals was 50.9 per cent.
“The latest results highlight the housing market is being impacted by the social distancing measures and weaker confidence related to the coronavirus pandemic.”
How long the market could expect to be impacted “depends on how long it takes to contain the virus and for sentiment to recover”, according to CoreLogic.