The number of owners withdrawing their property from auction soared to 40 per cent last week, following the introduction of a ban on auctions and open homes, according to CoreLogic.
Social distancing measures introduced by the federal government over the last week to limit the spread of COVID-19 – including a formal ban on auctions and open homes – have stalled the number of properties being sold.
According to CoreLogic, in the week ending 29 March, 3,203 homes across capital cities were set to go under the hammer. This would have made it the busiest week for auction activity so far in 2020.
However, due to the government restrictions coming into play on 25 March that banned in-house and on-site auctions, 40 per cent of those properties were withdrawn from auction.
The withdrawal rate shot up from just 7.5 per cent the previous week, according to property research group CoreLogic.
The remaining 60 per cent of auctions were forced onto online and remote platforms and returned a preliminary clearance rate of 51.4 per cent, the lowest preliminary rate recorded since June 2019.
Additionally, CoreLogic expects this figure to be revised further downwards as more accurate information and results are recorded.
Comparatively, the previous week saw a final clearance rate of 56.9 per cent across 2,599 auctions, whereas the same week last year saw a 50.9 per cent clearance rate across 2,164 auctions.
According to CoreLogic, the surge in auction withdrawal was anticipated by industry figures, considering rising levels of uncertainty on behalf of both buyers and sellers in this market, as well as the shift towards remote and online auctions, which could take some time for the market to adjust to.
Further, some reports from the week have seen agents battle technical challenges and connectivity issues, all of which will likely be resolved with additional preparation time, according to the research group.
The data for the week ending 29 March also suggested that there was a surge in the proportion of properties sold prior to auction, up from 22 per cent last week to 36 per cent.
CoreLogic speculated that home owners could have decided to bring forward the date of their auction in order to beat the introduction of the auction ban or have been motivated to sell their property before lockdown policies potentially escalate.
Looking forward, the coming months are likely to see substantially fewer auctions than normal, the property research group stated.
“We may see some vendors choose to convert their listing to a private treaty method, while others will likely pull their property from the market all together until confidence and selling conditions improve,” CoreLogic outlined in a statement.
“The auctions that proceed will likely utilise digital platforms such as Gavl or AuctionNow as well as proprietary platforms from the major real estate groups.”
Overall, CoreLogic is expecting to see a “substantial drop” in new property listings over the coming weeks, as buyers and sellers retreat to the sidelines and wait for some certainty to return to the market.