Prime Minister Scott Morrison’s decision to ban on-site and in-room auctions caused a major disruption for sellers this week but it failed to halt transaction activity as agents adapted with online auctions and private treaty sales.
Preliminary data from CoreLogic revealed the weekly auction clearance rate for Sydney auctions was 47.3 per cent, down from 58.8 per cent the week prior, with the majority of properties that failed to clear reported as “withdrawals”.
Many of those properties reverted to private treaty sales, with early indicators suggesting at least 400 of the nearly 1260 auctions originally scheduled for the week shifted to non-auction listings.
The auction clearance rate over the same week a year ago was 54.3 per cent. The final clearance for the past week will be reported on Thursday.
CoreLogic said the increase in withdrawals was expected given rising uncertainty from buyers and sellers. It would also take some time for the industry to embrace online and phone-in auctions, it said.
The group said the number of withdrawn auctions this week would likely rise as more results were reported and the final clearance rate would fall even lower.
CoreLogic still has to collect the results of 401 scheduled Sydney auctions, with the outcome of 862 of 1263 auctions declared so far.
About 80 per cent of the properties reported as clearing on Saturday were sold prior to auction, 19 per cent sold under the hammer, while the remaining properties sold after auction.
“Looking forward, the coming months are likely to see substantially fewer auctions than normal,” CoreLogic explained in a weekly auction report.
Among the highest prices was the $3.375 million paid under the hammer for a house on Alexandra St in Hunters Hill listed with McGrath agents Tracey Dixon and Stephanie O’Sullivan.
The price was $1.47 million higher than what the property sold for in 2014, sales records showed.
A four-bedroom house on Cook St in Cronulla sold via online bidding platform AuctionNow for $2.35 million.
Ray White Group managing director Dan White said weekend sales showed the auction method still worked.
“Don’t be swayed by people that say auctions don’t work anymore. Instead talk to those agents that have already adjusted and have found new solutions,” he said.
“There is panic everywhere, and the agency community is not immune, but great agents that stay focused on delivering for their customers continue to post great results.”
Realestate.com.au chief economist Nerida Conisbee said auction clearance rates should be kept in perspective.
“While clearance rates get a lot of publicity, the reality is that very few homes sell by auction,” she said, pointing out only 19 per cent of total Sydney sales were by auction in 2019.
“Given auction activity will drop dramatically, the use of clearance rates as an indicator of sentiment will become redundant.”