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Calls for vendors to be ‘pragmatic’ as auction market yet to rebound
Early clearance results for the combined capitals saw a small increase last week, showing a slight rebound after dipping the week prior, following the federal government’s tax reforms.
Cotality’s Property Market Indicator Summary for the week ending 24 May showed clearance rates across the combined capitals reached 58.2 per cent, marking a slight rise from 57.5 per cent the week prior.
Sydney led the preliminary clearance rate rise, posting a leap to 56.9 per cent from 49.2 per cent the week prior, which was similar to lows seen during early stages of the pandemic.
Across the Harbour City, 823 homes went to auction last week, up by a third on the previous week when 619 auctions were held.
Menck White auctioneer, Clarence White, said there was unlikely to be real improvement in the market, predicting the final auction results for last weekend would be much lower.
“I wouldn’t be surprised if that 56.9 per cent that Cotality reported ends up being about 50, which is where it’s been trending,” he told SPI.
“I don’t think that that was indicative of any kind of improvement or bump out in the field, not that we saw - we thought it was pretty poor, the same as the week prior.”
White said he held seven auctions scheduled on Saturday and didn’t sell a single property, with three of the auctions seeing zero bidders.
“Our metrics for the week were really low on registered bidders; our clearance in our business was 47 per cent for the week,” he said.
Melbourne’s preliminary clearance rate dipped slightly to 60.2 per cent from the previous week’s result of 61.4 per cent, remaining above the 60 per cent threshold for the second week in a row.
Brisbane’s preliminary clearance rate came in at 45.7 per cent, the lowest early auction outcome for Brisbane since April 2023.
In Adelaide, the preliminary clearance rate of 72.0 per cent remained the highest of the capital cities, despite slightly falling from 75.7 per cent the previous week.
In Canberra, the preliminary clearance rate was steady at 54.3 per cent, showing only a minor change from the previous week’s 54.0 per cent.
Cotality said this week, 2,750 properties were currently scheduled for auction, with Sydney and Melbourne expected to see significant market activity, with each city having over 1,000 properties scheduled for auction.
White said that the three combined factors of rising rates, property tax reforms and increased fuel prices were continuing to spook buyers, creating a “perfect storm” that was affecting sentiment.
“I think what we’re really seeing is very low confidence as a result of that, and when buyers get unconfident, they won’t buy, or they say, ‘we wait and see’, and that ends our competition.
“Then suddenly you’ve got less buyers, and the buyers who are around are less confident, it sort of snowballs. Buyers are just really, really cautious on price.
Additionally, White said that some vendors didn’t understand what was happening with buyers and the market, and were hanging onto unrealistic pricing expectations.
“The sellers that are reasonable and being pragmatic and making decisions at reasonable levels, then they’re getting deals done,” he said.
“But the ones that are insisting on hanging out for a price that just isn’t there in the market generally aren’t selling at the moment,” he concluded.
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