Analyzing the Auction Market and Property Trends: A Comprehensive Review

The auction market witnessed a slight dip in volumes over the first week of spring, reflecting a seasonal adjustment that often accompanies the transition from winter. This week, there are 2,132 capital city homes scheduled for auction, marking a 7.9% decrease from last week’s figure of 2,315. This decline is not entirely unexpected, as historical data shows similar trends during this period. Last year at this time, 2,275 homes were slated for auction across the combined capitals, indicating a consistent pattern in auction activity. Despite the recent decrease, projections suggest an uptick in the coming weeks, with estimates predicting around 2,500 auctions. Such fluctuations are typical in the property market, influenced by various factors including seasonal changes, economic conditions, and buyer sentiment.

Melbourne is expected to be the busiest auction market this week, with 955 auctions scheduled. This figure represents a 9.2% drop from last week’s 1,052 auctions and is 6.0% lower than the 1,016 auctions recorded at the same time last year. Melbourne’s property market has been resilient, but it is not immune to the broader market dynamics that affect auction volumes. Sydney follows closely with 820 auctions scheduled, down 6.2% from last week’s 874. Last year, Sydney had 898 homes taken to auction during this period, reflecting a similar trend of slight declines. These numbers highlight the competitive nature of the property markets in Australia’s largest cities, where demand and supply factors continually shape auction outcomes.

Brisbane is set to see 152 homes go under the hammer this week, a slight decrease from last week’s 156. Adelaide will host 147 auctions, down from 153 the previous week, while Canberra will see a significant drop with only 44 homes scheduled for auction compared to 70 last week. Perth, on the other hand, will have 11 auctions, a marginal increase from 10 last week, and Tasmania will see three homes taken to auction. The overall decrease in auction activity across these cities indicates a broader market trend, possibly influenced by economic uncertainties or seasonal variations. However, the upcoming weeks are expected to bring more activity as the spring selling season gains momentum.

The auction market preview for the week ending 8 September 2024, thus, shows a general decrease in auction activity compared to the previous week. Caitlin, a seasoned research analyst with over a decade of experience in property data and analytics, joined the CoreLogic research team in 2013. Her expertise in auction reporting, weekly activity updates, and customized data briefs using high-frequency data sets makes her insights invaluable. According to Caitlin, the dip in auction volumes is a temporary phase, with expectations of increased activity in the coming weeks. Her analysis is based on comprehensive data sets that track market trends and provide accurate forecasts.

CoreLogic’s property market indicator summary for the last week of winter showed a notable increase in auction volume, with 2,252 properties auctioned, the highest since June 2024. However, preliminary clearance rates have decreased, indicating a slight drop in the success rate of auctions. Melbourne saw 1,006 homes go under the hammer, surpassing the 1,000-auction mark for the first time since mid-June. Interestingly, the city’s preliminary clearance rate increased despite the higher volume, suggesting strong buyer interest and competitive bidding. Sydney also recorded its highest volume since June 2024, with 862 homes auctioned, although its preliminary clearance rate dropped from the previous week. These figures underscore the dynamic nature of the auction market, where volumes and clearance rates can vary significantly based on numerous factors.

Smaller capital cities did not experience the same seasonal increase in auction volumes. Brisbane’s 158 homes auctioned were in line with the city’s average winter volume, while Adelaide saw a slight increase compared to its winter average. Canberra’s auction volume was below the previous week but higher than the average winter volume, indicating some variability in auction activity. Perth reported a 75% success rate out of 10 auctions, demonstrating a relatively stable market. No properties were auctioned in Tasmania during the last week of winter. Adelaide had the highest preliminary clearance rate among smaller auction markets, while Brisbane and Canberra recorded lower preliminary clearance rates. These trends highlight the regional differences in auction activity and market performance across Australia.

CoreLogic predicts a 20% increase in new listings during the spring selling season, with auction volumes expected to trend higher. This forecast aligns with historical patterns, where spring typically sees a surge in property listings and auction activity. The low interest rate environment continues to support the housing market, driving demand and encouraging both buyers and sellers to participate in the market. However, concerns about housing affordability, particularly for first-time buyers, persist. The potential for a housing bubble in major cities is also a topic of discussion among experts, although current market conditions suggest sustained growth in the near term.

August was an eventful month for the share market, with fluctuations in the ASX 200 index and a rise in home values. While there was no growth in the ASX 200 index, the national median dwelling value increased by 0.5%. This diverse performance reflects the varying dynamics within the financial and property markets. Some ASX stocks performed exceptionally well during the August earnings season, with the top five performing ASX shares influenced by strong company reports. Notably, buy now, pay later share Zip Co Ltd (ASX: ZIP) saw a 31.51% increase in share price, making it the top-performing ASX 200 share for the month. The company’s shares are up 265% year-to-date, highlighting the robust performance of certain sectors despite broader market challenges.

In the property market, Perth, Adelaide, and Brisbane were the strongest performers among capital city markets, with median house prices increasing. Perth saw the most significant growth, driven by strong demand and limited supply. CoreLogic data suggests that the pace of price growth is slowing due to affordability constraints, particularly in mid-sized capitals like Perth, Adelaide, and Brisbane. Melbourne, on the other hand, experienced a decrease in median dwelling value over the past year, potentially due to increased supply. These trends indicate the complex interplay between supply, demand, and affordability in shaping property market outcomes.

The spring selling season has started, coinciding with the last week of winter, and this week saw the highest number of auctions since June. Data from CoreLogic shows an increase in auction activity, with the housing market remaining strong and prices continuing to rise. Sydney and Melbourne saw the most auction activity, with clearance rates above 80%, indicating robust buyer interest. The average number of bidders at auctions also increased, reflecting heightened competition. Property markets in Brisbane, Adelaide, and Perth also experienced growth, supported by the low interest rate environment. The upcoming federal election is not expected to slow down the housing market, as economic fundamentals remain strong.

The auction process is becoming more digitalized, with online auctions gaining popularity. This trend has been accelerated by the COVID-19 pandemic, which necessitated social distancing measures and prompted a shift towards digital platforms. Online auctions offer convenience and accessibility, allowing buyers to participate from anywhere. However, concerns about housing affordability for first-time buyers persist, with some experts predicting a potential housing bubble in major cities. The market for luxury homes is also showing signs of growth, with high-end properties attracting significant interest. The sale of Sydney’s landmark Shakespeare Hotel, sold for $7.9 million, highlights the growing demand for heritage properties and their increasing value.

The success of the Shakespeare Hotel sale reflects the resilience of the property market, even amid broader economic uncertainties. The current owners bought the hotel for $1.35 million in 2010, and its recent sale price underscores the substantial appreciation in property values over the past decade. The increasing demand for heritage properties is driving up their value, with many being repurposed for commercial use. This trend is likely to continue as investors seek unique and historically significant properties. The sale of heritage buildings like the Shakespeare Hotel sets a precedent for future transactions, highlighting the importance of preserving historical sites while adapting them for modern use.

Overall, the auction market and property trends indicate a dynamic and evolving landscape. While there are short-term fluctuations in auction volumes and clearance rates, the long-term outlook remains positive. The spring selling season is expected to bring increased activity, supported by low interest rates and strong buyer demand. However, challenges such as housing affordability and potential market bubbles need to be addressed to ensure sustainable growth. Caitlin’s insights and analysis provide valuable guidance for navigating the complexities of the property market, offering a comprehensive understanding of current trends and future prospects.