Competition in the Australian property market intensified this week as first home buyers rushed to secure homes before prices rise further. Approximately 2,662 homes went to auction, marking the highest volume since late May. According to data from Cotality, 73.8 percent of these listings sold, the strongest clearance rate seen in four weeks. Next week is expected to see around 3,200 homes scheduled for auction, although activity is likely to dip in Victoria during the Melbourne Cup long weekend.
The increasing clearance rates indicate a positive trend for property prices, as noted by Nicola Powell, research chief at Domain. Powell stated, “The high clearance rate really shows that the depth of demand is there. We’re now well into spring, and auction volumes are much higher. The last few weeks have demonstrated that buyers are coming to the party.”
Sydney and Melbourne Lead the Way
In Sydney, 1,082 auctions took place, marking the city’s second-highest volume this spring and only the fourth week this year with over 1,000 auctions. Data from Domain reveals that nearly 40 percent of homes in Sydney are being sold before auction, the highest ratio since 2021. Powell highlighted, “The consistent increase in homes selling before auction indicates rising momentum in the market.”
Melbourne hosted the most auctions this week with 1,248 listings and a clearance rate of 74.4 percent. This figure, however, fell short of the spring high of 78.6 percent recorded at the end of September. Powell added, “The consistency of price growth is drawing in sellers, particularly in Melbourne, where we know the market has underperformed.”
According to Louis Christopher, founder of analytics firm SQM Research, the current clearance rates signify a robust market. Factors contributing to this demand include a drop in interest rates to 3.6 percent, enabling more first home buyers to enter the market with only a 5 percent deposit while avoiding lenders mortgage insurance. Christopher anticipates an increase in auction volumes in Melbourne over the next two weeks, although activity will slow during the Melbourne Cup weekend.
Regional Performance and Buyer Trends
Brisbane led the smaller capitals with 198 homes going to auction, achieving a clearance rate of 70.7 percent. The Australian Capital Territory had 104 homes go under the hammer, resulting in a clearance rate of 66 percent. Adelaide recorded 96 auctions, with 77.4 percent of homes sold, while Perth saw only 14 homes auctioned, with no auctions occurring in Tasmania.
The competition among first home buyers is evident, as illustrated by a recent auction for a two-bedroom apartment in Melbourne’s inner-city Richmond. A buyer secured the property with a final bid of $775,000, exceeding the reserve by $65,000. The buyer, returning from New Zealand, expressed excitement about the apartment’s unique features and stunning views. Real estate agent Luke Saville remarked, “The fear of missing out is back, and there’s a real lack of good-quality supply on the market.”
The most expensive property sold at auction this week was a luxurious three-level, seven-bedroom home in Sydney’s Strathfield, fetching $16.3 million. In Melbourne, a four-bedroom period-style home in Essendon sold for $4.3 million, according to Domain.
As the auction season progresses, the surge in first home buyers and competitive bidding reflects a growing confidence in the Australian property market, setting the stage for continued activity and potential price increases in the coming months.
