Auction clearance rate inches higher in glimmer of hope for sellers

• Auction clearance rates have inched their way to 51.5 per cent from the weekend in the first indication of positive news for sellers.
• Despite the list in the clearance rate, activity remains more than 40 per cent below year-on-year levels.
• It’s been the slowest start to a Spring selling season in decades, but early signs indicate more buyers are willing to engage.

Preliminary auction clearance rates from Australia’s capital cities have begun to inch their way higher, providing a kernel of hope for sellers who face one of the toughest markets in decades.

Early data from property research firm Cotality revealed the weekend’s sales lifted the clearance rate to 51.5 per cent, up 1.2 per cent from the prior week.

Things are beginning to look most promising for those in Melbourne, where the clearance rate rose to 59.1 per cent, the highest result in eight weeks and above the spring-to-date average of 55.1 per cent.

Sydney’s clearance rate declined to 52.3 per cent, while Brisbane’s rose to 31.2 per cent. Adelaide recorded a clearance rate of 46.5 per cent, while Perth saw a rate of 36.4 per cent from 17 auctions.

Week-on-week, vendors have begun to see signs of hope during a period that has been statistically hard for sellers to bear.

Compared to the same period last year, auction activity across all the capitals remains more than 40 per cent below normal levels, and only just above the normal rate in winter, traditionally a poor time to sell a property.

Buyer’s agent Charles Corby said many borrowers are anticipating tougher times as interest rate changes from the major banks kick in this Friday.

“The big banks’ rate rises kick in on Friday 13 November, and across my portfolio I’m looking at an extra hundreds or even thousands a month,” he said.

“The cash rate is now at its highest level since 2008, and plenty of homeowners and investors who bought in the last few years have never paid rates this high.

Subscribe here for our FREE Tuesday and Thursday newsletter

Email address

Subscribe

“We’re in uncharted territory, and I think we’re going to see people doing desperate things to stay afloat.”

Corby said many are cutting back, and he believes the economy is set for a prolonged downturn.

“One homeowner I spoke to last week even said he’s considering starting a GoFundMe page to cover his mortgage,” he said.

“When people are crowdfunding their home loans, you know things have gone too far.

“Others I’ve spoken to personally have cancelled their general insurance because they can’t afford it on top of everything else, or are cutting back on food.

“To me, these are all the hallmarks of a looming recession.”