Auction clearance rates plunged over the June quarter in response to rate hikes, rising inflation and weak buyer sentiment.
Despite auction volumes over the quarter being the second highest on record (behind Q2 2021), many homes were failing to sell via auction, the latest CoreLogic auction data revealed.
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The percentage of successful auctions (60.8 per cent) was down 14.9 percentage points from the same period last year (75.7 per cent).
This represented the lowest clearance rate - the percentage of properties sold at auction - for any quarter since September 2020 (59.2 per cent).
Tasmania recorded the lowest clearance rate of 41.7 per cent, followed by Perth at 46.4 per cent.
Adelaide’s property market was still performing well, with the highest clearance rate for the quarter of 75 per cent.
Canberra was the second-best performer, with a 68 per cent clearance rate, followed by Melbourne (61.1 per cent) and Brisbane (58.7 per cent).
Sydney’s clearance rate for the quarter was 57.2 per cent.
“The trend towards lower clearance rates has been most visible in Sydney and Melbourne, where housing values are now falling and advertised stock levels are back to above-average levels,” CoreLogic research director Tim Lawless said.
”However, clearance rates are also trending lower in stronger markets like Brisbane and Adelaide.
“Seasonally, the number of auctions held in winter normally trends lower, however, it’s possible this could be amplified this year as the housing market moves into a downturn.
“Potentially we could see more vendors choosing to sell by private treaty rather than auction as fewer competitive bidders make the auction process less effective at achieving the best possible price.”
Lawless said the latest results highlighted tougher selling conditions in the face of rising interest rates and low consumer sentiment.
“In the first three months of the year, clearance rates held up at about 70 per cent but, just as we’ve seen the rate of growth in values slow since peaking in early to mid-2021, the same trajectory has impacted the auction market,” he said.
“The combined capital city clearance rate hit a record peak of 80.0 per cent in March 2021 and has been gradually declining ever since.”
Melbourne was the busiest market for auction volume, with 13,818 homes taken to auction for the quarter.
Adelaide was also busy for a small city, with 2,457 auctions for the quarter.