Auction Markets Strain Under Lockdown
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Auction Markets Strain Under Lockdown

High numbers of withdrawals saw the clearance rate dip at the weekend.

By Kanebridge News
Mon, Jul 26, 2021 10:11amGrey Clock 2 min

While Auction numbers remain high – with 1944 listings reported on Saturday, July 24 – the national clearance rate suffered due to COVID-related lockdowns falling to 77.3% when compared to the previous weekend’s 80.5%, the lowest results of the year.

Clearance rates were lower in all capitals on Saturday – with Sydney and Melbourne experiencing a high volume of withdrawals – with the exception of Canberra.

In Sydney, auction numbers were sharply low – due to the COVID lockdown.

A total of 566 homes were reported as auctioned on Saturday which was well below the 872 July record set last weekend – the lowest reported on a non-holiday weekend since February 13 this year.

The clearance rate was also lower, falling to a year low 75.1% compared to the previous weekend’s 78.0%. However, it remained higher than the 70.4% recorded over the same weekend last year.

A total of 24% of reported auctions were withdrawn.

The NSW capital recorded a median price of $1,532,500 for houses sold at auction at the weekend which was lower than the $1,603,000 reported over the previous Saturday but 17.7% higher than the $1,302,500 recorded over the same weekend last year.

In turn, Melbourne’s auction market held the line on Saturday, producing relatively strong results.

The Victorian capital recorded a robust 73.0% clearance rate at the weekend – close to the previous weekend’s 73.2% but well ahead of the 47.7% recorded over the same weekend last year.

The clearance rate was again impacted by 30.6% of auctions withdrawn.

A total of 1120 homes were listed to go under the hammer on Saturday, ahead of last weekend’s previous record 1061 auctions and significantly higher than the 527 auctions over the same weekend last year.

Melbourne recorded a median price of $938,000 for houses sold at auction at the weekend which was lower than the $992,500 recorded over the previous weekend but 9.4% higher than the $857,000 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson, My Housing Market.


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Mortgage holders should brace themselves for more pain as the Reserve Bank of Australia board prepares to meet tomorrow for the first time this year.

Most economists and the major banks are predicting a rise of 25 basis points will be announced, although the Commonwealth Bank suggests that the RBA may take the unusual step of a 40 basis point rise to bring the interest rate up to a more conventional 3.5 percent. This would allow the RBA to step back from further rate rises for the next few months as it assesses the impact of tightening monetary policy on the economy.

The decision by the RBA board to make consecutive rate rises since April last year is an attempt to wrestle inflation down to a more manageable 3 or 4 percent. The Australian Bureau of Statistics reports that the inflation rate rose to 7.8 percent over the December quarter, the highest it has been since 1990, reflected in higher prices for food, fuel and construction.

Higher interest rates have coincided with falling home values, which Ray White chief economist Nerida Conisbee says are down 6.1 percent in capital cities since peaking in March 2022. The pain has been greatest in Sydney, where prices have dropped 10.8 percent since February last year. Melbourne and Canberra recorded similar, albeit smaller falls, while capitals like Adelaide, which saw property prices fall 1.8 percent, are less affected.

Although prices may continue to decline, Ms Conisbee (below) said there are signs the pace is slowing and that inflation has peaked.

“December inflation came in at 7.8 per cent with construction, travel and electricity costs being the biggest drivers. It is likely that we are now at peak,” Ms Conisbee said. 

“Many of the drivers of high prices are starting to be resolved. Shipping costs are now down almost 90 per cent from their October 2021 peak (as measured by the Baltic Dry Index), while crude oil prices have almost halved from March 2022. China is back open and international migration has started up again. 

“Even construction costs look like they are close to plateau. Importantly, US inflation has pulled back from its peak of 9.1 per cent in June to 6.5 per cent in December, with many of the drivers of inflation in this country similar to Australia.”


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