Auction Market Faces Significant Drop Amid AFL Grand Final Festivities

The auction market in Australia’s major cities is set to experience a significant decline in activity for the week ending 29 September 2024. According to CoreLogic, a leading property data and analytics provider, the number of homes scheduled for auction will decrease by 31.6% compared to the previous week. This reduction in auction volumes is primarily attributed to the AFL Grand Final, a major sporting event that will take place in Melbourne and Adelaide. The grand final festivities have historically led to a slowdown in real estate transactions as potential buyers and sellers alike turn their attention to the game.

This week, there are 1,903 homes scheduled for auction across the combined capitals, a notable drop from the 2,781 auctions held last week. However, this figure still represents an increase from the 1,198 auctions conducted during the same period last year. Melbourne, in particular, is expected to see its quietest auction week since late January, with only 243 auctions scheduled. This is a dramatic decrease from the 1,335 auctions held last week but remains higher than the 203 auctions recorded at the same time last year. The AFL Grand Final’s impact on Melbourne’s auction market is profound, underscoring the cultural significance of the event in the city.

In stark contrast to Melbourne, Sydney is gearing up for its busiest auction week since April 2022. The city has 1,270 homes scheduled for auction this week, up from 1,009 last week and nearly double the 714 auctions held during the same period last year. This surge in auction activity in Sydney highlights the divergent trends in Australia’s real estate markets, influenced by local events and economic conditions. While Melbourne’s market slows down due to the AFL Grand Final, Sydney’s market appears to be thriving, driven by strong demand and favorable market conditions.

Adelaide, another city hosting the AFL Grand Final, is also expecting a decline in auction numbers. The city will see a 37.0% drop in weekly auction activity, with only 131 homes scheduled for auction compared to 208 the previous week. Despite this decrease, Adelaide’s auction market remains relatively active, reflecting the city’s steady real estate market. In contrast, Brisbane and Canberra are set to see increases in weekly auction activity, with Brisbane experiencing a 5.9% rise and Canberra a substantial 36.8% increase. Brisbane will have the busiest auction week among the smaller capitals, with 144 auctions scheduled, followed by Canberra with 116 auctions, marking its busiest week since mid-March.

Perth, however, will see minimal auction activity, with only 10 homes scheduled for auction this week. Tasmania, on the other hand, has just one auction planned. These figures highlight the varied dynamics of Australia’s regional real estate markets, where local factors and seasonal events can significantly influence auction volumes. The upcoming long weekends in New South Wales, Australian Capital Territory, Queensland, and South Australia are also expected to contribute to the low auction numbers next week. However, auction activity is anticipated to rise again in the following week as the market rebounds from the temporary slowdown.

Last week was the busiest auction week for the combined capitals since before Easter, with 2,781 auctions conducted. However, the final clearance rate dropped to 60.7%, the lowest so far this year, and 5.4 percentage points lower than the same time last year. Melbourne had the most auctions at 1,335, but its clearance rate fell below 60% for the first time in eight weeks. Sydney also saw a high number of auctions at 1,199, but its clearance rate was 61.6%. These figures suggest that while auction volumes were high, the success rate of these auctions was lower, possibly due to increased competition and buyer caution.

Adelaide had the highest clearance rate among the smaller capitals at 76%, followed by Brisbane, Perth, and Canberra. Canberra had the lowest success rate at 44.7%, and Tasmania’s single auction was unsuccessful. CoreLogic reports that this decrease in clearance rate is likely due to the long weekends and the AFL Grand Final. The decrease in auction activity is also expected to have an impact on the final clearance rate. Over the past year, Sydney and Melbourne have consistently had the highest auction volumes and clearance rates. However, this week’s numbers show a significant decrease in activity for Melbourne, while Sydney’s numbers have risen.

Overall, the auction activity in Australia’s combined capitals is expected to be significantly lower this week, but Sydney is an exception as it gears up for its busiest week since April 2022. Trends in smaller capitals are mixed, with some seeing decreases in activity while others are expecting an increase. This divergence in auction activity underscores the complexity of Australia’s real estate market, where local events, economic conditions, and seasonal factors all play a role in shaping market dynamics. As the market navigates these fluctuations, buyers and sellers must stay informed and adaptable to make the most of the opportunities available.

Kaytlin Ezzy, an economist and member of CoreLogic’s research team, specializes in data analysis and visualization. She notes that the number of Australian suburbs with median house or unit values in the million-dollar club has reached a new record high. This trend reflects the broader growth in property values across the country, driven by strong demand, limited supply, and favorable economic conditions. Despite the current slowdown in auction activity, the long-term outlook for Australia’s real estate market remains positive, with continued growth expected in the coming months.

The upcoming long weekend presents a unique opportunity for buyers to take advantage of reduced competition. Some sellers may choose to hold off on auctions during the long weekend to avoid lower clearance rates. The Grand Final weekend is traditionally a slow time for real estate activity, but this year’s unique circumstances may impact the usual trends. It is unclear how the Grand Final will affect the real estate market in the long term, but the short-term impact is evident in the reduced auction volumes and lower clearance rates.

The hotel industry, which has been heavily impacted by the pandemic, is also feeling the effects of the AFL Grand Final. Some hotels are offering attractive deals for those traveling to attend the Grand Final, hoping to capitalize on the influx of visitors. Overall, it is anticipated that the real estate market will continue to thrive in the coming months despite the decrease in clearance rates. As the market adjusts to the temporary slowdown caused by the AFL Grand Final and long weekends, buyers and sellers should remain vigilant and prepared to act when opportunities arise.

In conclusion, the auction market in Australia’s major cities is facing a significant drop in activity due to the AFL Grand Final and upcoming long weekends. While Melbourne and Adelaide are expected to see the most substantial declines, Sydney is set for a busy week, highlighting the varied dynamics across different regions. As the market navigates these fluctuations, it is essential for buyers and sellers to stay informed and adaptable. Despite the current slowdown, the long-term outlook for Australia’s real estate market remains positive, with continued growth anticipated in the coming months. By understanding the factors influencing auction activity and staying prepared, participants can make the most of the opportunities available in this dynamic market.