We take a look at last week's auction markets in Adelaide, Melbourne, and Sydney.
Final clearance rates for Australia's combined capital cities have languished in the mid-to-high 60s range for five weeks now, according to the latest CoreLogic numbers.
Adelaide recording strong sales from low volumes
The preliminary clearance rate last week in Adelaide was 56.1 per cent, with 41 auction results recorded from a total 61 auctions, according to the CoreLogic data.
Last week, a total of 80 auctions were held in Adelaide.
Toop&Toop sales partner and corporate auctioneer, Bronte Manuel, told SCHWARTZWILLIAMS that volumes are down, but he is still achieving strong prices at auction.
"The number of auctions have certainly slowed due to the lower amounts of stock on the market, although personally I have found a spike in the success of auctions and fierceness in bidding.
"Every weekend I seem to be calling standout sales, for example properties projected for a sale in the $800,000-$850,000 region are selling for $1,000,000," he said.
Manuel gave the example of 18A Dudley Avenue in Prospect, which had a price expectation of around $695,000-$740,000, but it ended up selling at auction for $819,000.
Similarly, a property at 30 Kintore Avenue, Kilburn, set a suburb record for highest residential price paid when it sold for $631,000. "We were expecting between $525,000-$550,000," said Manuel.
Demand for good properties is still high, said Manuel, but there is a shortage of stock on the market.
“I believe the only thing slowing in this market is stock levels. The prices and demand are still at a high," he said.
Though South Australia is not known as a big auction market, with only around 10-12 per cent of its properties being sold under the hammer, it is "fast becoming the preferred method of sale", said Manuel.
"A transparent bidding process is the key to the standout sales and suburb records we’re seeing at the moment," he said.
Real Estate Institute of South Australia CEO, Greg Troughton, concurred with Manuel's comments.
He told SCHWARTZWILLIAMS, "Despite Adelaide not being recognised as an auction area, those vendors and agents going to auction are finding themselves in a good position. The last few months have seen Adelaide’s clearance rate hover between 65% and 70%.
"Many astute vendors and their agents are seeing that, with less on the market, the benefit of the auction process is increasing."
"The REISA is hopeful that auction will continue strongly through the winter months as the optimum selling process, especially given the lack of stock available in the Adelaide market place," said Troughton.
South Australia is headed for a state election, which is likely to slow the market, said Troughton.
"We are about to head into, if not already into it, upwards of a 35 week non-official election campaign and for one reason or another, things start to slow when there is an election smell in the air," he said.
Melbourne still recording strong clearance rates, despite the cold weather
Melbourne recorded a 77 per cent auction clearance rate, according to Real Estate Institute of Victoria CEO, Gil King.
“Despite the cold weather, Melbourne’s auction market continues to perform strongly with a preliminary clearance rate of 77 per cent recorded from around 600 auctions,” King told SCHWARTZWILLIAMS.
A total of 590 auctions were held over the weekend, compared with only 550 auctions at the same time last year, when a 75 per cent clearance rate was recorded.
“Suburbs in the city’s middle north are seeing strong results under the hammer, with Mill Park recording a 100 per cent clearance rate this weekend from 11 auctions,” said King.
Another middle north suburb, Reservoir also recorded solid results under the hammer with all eight auctions selling. Bayswater and Werribee recorded 100 per cent clearance rates from seven and six auctions respectively. The City of Knox and Wyndham both achieved 95 per cent clearance rates over the week.
Sydney accepting the reality of more sustainable prices
Real Estate Institute of New South Wales president, John Cunningham, told SCHWARTZWILLIAMS the Sydney market has settled into a "new pattern of normality"; though it's no longer "frenzied", properties are still selling, and selling well.
"We have seen the cream come off the top of the previously frenzied market," he said.
Cunningham said some sellers have had to lower their price expectations.
"We have seen some properties sell well below their guide price as vendors face the fact that appraisals and expectations from two months ago are in many places not being met.
"Some results still hitting the highs of the June quarter environment, but these are in the minority," he said.
"Vendors are quickly realising it not what you get, but you can do with what you get that counts in this changing market," said Cunningham.
Preliminary clearance rates of around 70 per cent, that are revised down to around 65 per cent, are still "very healthy", said Cunningham.
"Reports are consistent from agents that most property passed in or withdrawn from auction are selling within two weeks."
Read more about auction clearance rates:
Weekend auctions litmus test of new first-home-buyer benefits