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Real Estate

Here’s how I interpret auction clearance results

Now that our property markets are on the move no Sunday morning is complete without checking the weekend clearance rates, especially for property pundits in Melbourne and Sydney.

That’s because the auction results are a timely gauge of conditions of what’s going on with the housing markets especially in our in our 2 big capital cities.

We report the weekly auction clearance results every weekend here at Property Update and it’s always one of the most read blogs on a Sunday.

But how useful are these figures and what should you interpret them?

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Note: Fact is, despite the preliminary auction clearance rates being reported promptly every weekend, to get the right information from these figures it’s increasingly important to apply a few adjustments.

Firstly the number of auctions being conducted is important.

Other than in Sydney and Melbourne, auction clearance rates don’t really give as good an indication of the general sense of the local market considering around 10 times the number of properties are put up for auction in the two big cities than in the smaller capitals each weekend.

Then we also need to adjust for:-

1. Early results skew high

The various data providers collect their auction data in part by agent’s phoning in their results and partly through a team of tele-callers contacting agents.

Not surprisingly, agents tend to report their successful auctions results earlier.

Most data providers report preliminary results on Saturday night or Sunday and then release a final estimate on the following Thursday.

The difference in terms of clearance rates is on average around 3-5 percentage points in Sydney and Melbourne.

Also, in the weaker market as we experienced in 2022 we saw more slippage than usual, and more properties being withdrawn from sale.


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