The national figure was likely to slip below the 70 per cent figure once more results of the 613 scheduled auctions come in, but the stronger results in Sydney and Melbourne will still leave the weighted average figure for Australia’s capital cities above the previous week’s 60.4 per cent.
“We’ve seen clearance rates come back to where they were prior to the restrictions. There’s no doubt there are fewer participants in the market who are ready to purchase a property, but the fact is the supply has also diminished,” said CoreLogic commentator Kevin Brogan.
“We’re much closer to being in balance than the first couple of weeks of April when thousands of properties were listed and agents were struggling to come to grips with online auctions in volume and there were masses of properties withdrawn.”
One sign of that return to balance came when competition pushed a three-bedroom house in Sydney’s prestige enclave of Palm Beach $350,000 above reserve.
There were four registered bidders for the 91 Florida Rd house with water glimpses, which eventually sold for $4.35 million.
“We had nine contracts out before the auction and had four registered bidders on the day,” said Ray White Prestige Palm Beach Principal Noel Nicholson. “Three of those bidders competed ferociously to really drive up the final sale price.
In Melbourne’s inner north-western Pascoe Vale, developers pushed the price of a 62-year-old house on a 1363sq m block $200,000 over reserve to sell for $1.55 million. The vendors, a married couple in their late 80s, had raised their own family at the 8 Devon Road home and were downsizing, Domain reported.
Sydney showed a 77.9 per cent preliminary clearance rate based on the reported 217 results of the 319 auctions scheduled for the city, while Melbourne’s 72 per cent reflected 118 of the 160 auctions scheduled. The remaining results have still to be collated and will likely pull the final clearance rates lower.
Canberra, with just 61 auctions scheduled, showed a 73.2 per cent clearance rate. Brisbane had 45 scheduled auctions and a 45.9 per cent preliminary rate and Adelaide just 14 auctions and a 38.5 per cent clearance.
But while the higher clearance rates mark a definite pick-up from a month ago, when large numbers of previously scheduled auctions were withdrawn at short notice, pushing recorded clearance rates down – as low as 30.2 per cent in the week ending 19 April – getting vendors to list their homes is a problem.
“Of people who pulled out, most haven’t come back. They’re still sitting on the sidelines,” said Dan White, managing director of the Ray White Group. “
“As soon as the lockdown came in, we dropped off a cliff in early April. Seventy to 80 per cent of auctions got pulled, despite all the ability to do online. That’s starting to come back up again, but slowly. We can’t seem to give enough confidence to our vendors to come back to market.”
Vendors are growing more confident, however. Mr Brogan said the past few weeks have showed a reduction number of homes sold prior to auction, indicating vendors were becoming more confident to see through their marketing campaigns and take their properties to auction, in expectation of getting a higher price.
However, the “short, sharp shock” of the pandemic restrictions had given a knock to confidence that would last longer than the restrictions themselves, Mr Brogan said.
“Most vendors, if they don’t have to sell, will simply choose not to,” he said.
This was only likely to reverse, however, once the various measures making it easier for owners to maintain their mortgage payments – such as JobKeeper payments and mortgage holidays – receded. This could prompt more stock to come on the market from owners forced to sell, he said.
“If the economy takes a while to gear up, then more people will find themselves in that position,” he said.
(AFR May 20)
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