Now is the winter of auction discontent as volumes reach new low

Made glorious by softening market conditions;
And all the inflation clouds that lour'd upon our house
In the deep bosom of Covid buried.

Now are our brows bound with victorious SOLD stickers;

Our bruised wallets hung up for monuments;

Our stern housing hysteria changed to merry meetings,

Our dreadful home inspections to delightful house warmings.

Well, that’s certainly the hope of those who take auction volumes reaching their lowest since early February as confirmation of a market softening and slow down – and a little Friday literary fun too.

Domain (ASX: DHG) said that across the combined capitals, auction volumes moved 4.5% down from last week to 1,330, making it the lowest since early February (excluding public holidays and federal election weekend).

In CoreLogic’s auction preview, 1,679 homes are scheduled for auction across the combined capitals. The company noted auction activity moved down 10.7% to the previous week and down 20.2% from the same time last year.

Annually, Domain data puts the change in auction volume to a downward movement of 30%.

Upcoming auction summary, 9 July 2022

City	Volume	Change in auction volume
City	Volume	Weekly	Annual	5-year average
Sydney	546	-7.5%	-23.8%	14.4%
Melbourne	544	3.8%	-41.4%	-3.2%
Brisbane	79	-6.0%	-26.9%	14.5%
Adelaide	107	-12.3%	59.7%	135.7%
Canberra	50	-23.1%	-24.2%	8.2%
Perth	2	–	–	–
Darwin	2	–	–	–
Hobart	0	–	–	–
Combined capitals	1,330	-4.5%	-30.0%	9.3%

Source: Domain.

*The annual and 5-year average change compared to the corresponding Saturday.

The busiest cities for auctions are Sydney and Melbourne, with CoreLogic data showing Sydney to hold 666 and Melbourne 613 auctions, and Domain data showing Sydney to hold 546 and Melbourne 544 auctions.

Not only will the harbour city be set for a busy of bout of bidding, it will also be the second consecutive week sitting at the top of all capital cities for volume, said CoreLogic. While Sydney holds the highest number of auctions, it is still down 11.9% from last week albeit up 2.5% from a year ago.

Domain figures have Melbourne bucking the downward volume trend, while the city has fewer houses than Sydney up for auction, the weekly change is up 3.8% compared to all other cities which saw fewer houses up for auction. CoreLogic data showed a different story, with auction activity expected to reduce by 6.3% compared to last week. The yearly change for Melbourne is down 43%.

Clearance rates

Grim-visaged bidding hath smooth’d their wrinkled front;

And now, instead of mounting barded bulging bank loans

To fright the souls of fearful adversaries,

They caper nimbly behind a numbered placard

To the lascivious pleasing of “going once, going twice, three times, SOLD!”

Domain data for combined capitals showed an increase compared to last week – the combined capital clearance rate was 56.8%, up 1.8 percentage points.

It is the ninth consecutive week of clearance rates hanging in the 50% range, Domain said the last time we had a run of weaker clearance rates was during the early days of the pandemic, between March and August 2020. Prior to pandemic, it was the first half of 2019.

CoreLogic data showed similar numbers, with last week’s clearance rate coming in at 53.2%.

Both data sets showed Adelaide was the strongest market, the South Australian capital also happens to have the lowest rental vacancy rates in the country with SQM and Domain putting it at 0.3%.

Saturday auction results, 2 July 2022

City	Clearance rate	Weekly change	Annual change	Volume	Auction sold	Sold prior	Withdrawn
Sydney	55.5%	2.8ppt	-13.0ppt	590	254	31.0%	27.7%
Melbourne	56.4%	1.9ppt	-14.5ppt	524	243	18.1%	10.7%
Brisbane	45.5%	-14.0ppt	-5.2ppt	84	30	10.6%	9.1%
Adelaide	73.3%	4,2ppt	-1.4ppt	122	74	13.9%	4.0%
Canberra	55.1%	-1.7ppt	-30.3ppt	65	27	20.4%	4.1%
Combined capitals	56.8%	1.8ppt	-12.6ppt	1392	629	22.8%	16.7%
* Geographies are based on ABS GCCSA geography. Auction reporting rates are 78% in Sydney, 82% in Melbourne, 79% in Brisbane, 83% in Adelaide and 75% in Canberra. The results will be revised as more auction results are collected. Of the scheduled auctions in Sydney, 13% were postponed. Of the scheduled auctions in Melbourne, 7% were postponed. Postponed auctions are not classified as a reported auction, and therefore this has a negative impact on the reporting rate. The results in this table could shift as more auctions are collected.

Source: Domain.

Adelaide had clearance rates in the 70% range according to Domain, last week Adelaide’s clearance rate was 65.4% for CoreLogic data.

Sydney’s clearance rate saw a minor improvement this week, sitting at 55.5% but remaining below 60% for the 12th consecutive week, with some of the weeks dipping into the 40s. Of all the capital cities, Sydney is showing the greatest weakness, which aligns with the broader market slowdown and suggests price falls will continue.

Melbourne’s clearance rate is up marginally week-on-week but remains down annually. This is the ninth week in a row clearance rates have been below 60% for four consecutive weeks.

Brisbane is less auction-centric compared to other cities, and as a result clearance rates can bounce from week to week, however consistently they are weakening annually.

It is the fourth week in a row that clearance rates have dipped below 60% in Canberra.

Here’s to a chilly auction weekend where most state capitals are expecting minimum temperatures in the single digits, and clearance rates may be going up as auctioneers count down, “going once, going twice, Richard III, SOLD”.