CoreLogic’s latest Property Market Indicator Summary has revealed how Australian auction-goers are reacting to the coronavirus pandemic.
Despite continued uncertainty being caused by the COVID-19 outbreak, the combined capital cities saw the second busiest week for auction activity this year.
According to CoreLogic’s latest Property Market Indicator Summary for the week ending 22 March 2020, 2,539 homes were taken to auction across the combined capital cities, marking the second-highest amount in one week for 2020 so far.
That being said, the preliminary auction clearance rate took a hit over the past week, coming in at 61.3 per cent and expected to drop to below 60 per cent.
“A preliminary auction clearance rate of 61.3 per cent... is still substantially higher than a year ago when values were falling, but well down on the recent highs,” CoreLogic said.
“This week’s preliminary auction results mark a turning point in buyer and seller sentiment, with withdrawal rates rising as vendors think twice about testing the market and buyers losing confidence or choosing to avoid public gatherings.
“Prior to this weekend, the year to date withdrawal rate across the preliminary reading was averaging around 5 per cent across the combined capital cities, rising to just over 8 per cent on Sunday’s numbers. In all likelihood, we will see more vendors choosing to withdraw from the market until confidence and selling conditions improve.”
The CoreLogic findings for the week ending 22 March 2020 indicate mixed reaction to the week prior.
“In comparison, the previous week saw 2,274 homes taken to auction returning a preliminary auction clearance rate of 70.6 per cent, before revising down to a final clearance rate of 65.3 per cent,” CoreLogic said.
“While the clearance rate has fallen, it remains stronger than this time last year when 1,667 homes were taken to auction and a clearance rate of 50.9 per cent was recorded.”
According to CoreLogic, the latest results highlight the housing market is being impacted by the social distancing measures and weaker confidence related to the coronavirus pandemic.
“To date, there is no evidence of reduced housing values; however, it is clear that transactional activity will be temporarily disrupted coming weeks and months,” it said.
“The extent of this disruption depends on how long it takes to contain the virus and for sentiment to recover.”