Pre-winter auction spree expected amid Melbourne lockdown
Auction levels across most capital cities are expected to rise this week, but Melbourne could be in for a different ride as the city enters yet another lockdown.
Prior to the Victorian government decision to enter a seven-day snap lockdown, a total of 3,162 capital city homes were set to go under the hammer in the week ending 30 May 2021, 11 per cent higher than last week’s 2,838 auctions held, according to CoreLogic’s latest auction market preview.
The high volume was expected to surpass the second busiest week of 2021, which occurred in early May, when 3,016 auctions were held.
Among the capital cities, Melbourne and Sydney continue to account for more than 80 per cent of all expected auction activity, with 1,451 and 1,291 homes scheduled for auction, respectively.
But the anticipation of a high level of activity in Melbourne may not be sustained, with businesses once again restricted from trading, with residents once again unable to travel any further than five kilometres from their home – and for five essential reasons only.
Weighing in post the announcement of the lockdown, CoreLogic’s head of research, Tim Lawless, said he expects “a larger than normal proportion of vendors likely to negotiate a sale outside of the auction format or simply postpone their auction event to a later date”.
“The timing for Melbourne is far from ideal; this week was shaping up to be the second biggest auction week so far this year.”
But, even with the lockdown, the researcher said clearance rates should remain strong for those vendors that still choose to press ahead either online or remotely.
Ultimately, if previous lockdowns are anything to go by, Mr Lawless forecasts a “short and sharp impact on auction markets and the housing market … as long as the virus is contained and social distancing restrictions aren’t implemented for an extended period of time”.
Meanwhile, the smaller capital cities have far fewer properties going to auction this week, with Brisbane at 200, Adelaide at 160, Canberra at 95, Perth at 34 and Tasmania at three.
Last week’s results
The expectation for a big week came off the back of slightly lower success rates recorded through the previous week.
The week ending 23 May 2021 saw 2,838 auctions held across capital cities, which returned a final auction clearance rate of 75.6 per cent – the lowest clearance rate recorded for the combined capital cities this year.
Despite the drop, it would come as no surprise to agents that the latest capital city clearance rate remains higher than the results recorded over the same period last year, when 612 auctions returned a final success rate of only 62.7 per cent amid a period of COVID restrictions.
Zooming in on the capital cities, Canberra retained the crown for the highest final clearance rate at 86.1 per cent out of 115 auctions, followed by Sydney at 76.9 per cent out of 1,103 auctions and Adelaide with 77.6 per cent out of 161 auctions.
Melbourne and Brisbane followed, with final success rates of 74.9 per cent and 64.8 per cent
Of the capital cities, Perth recorded the lowest final clearance rate at 59.1 per cent.
All capital cities recorded declines in final clearance rates amid higher volumes, with Brisbane and Perth seeing the largest falls at 8.1 and 6.1 percentage points, respectively.
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