Property Auctions

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There are 1,392 homes scheduled for auction across the combined capital cities this week, increasing on the 1,176 auctions last week and higher than the 1,124 last year, according to CoreLogic data.
Sydney and Melbourne were both expected to see a rise in the number of homes auctioned this week, however given Melbourne’s restrictions, a large portion of these are likely to be withdrawn, as we’ve seen over the past few weeks.
This is a familiar scene from the first lockdown as homes were pulled from auctions heavily during that period.
In Sydney, 642 auctions are scheduled across the city, a 25% rise on last week’s volumes (515) and also higher than scheduled volumes from one year ago (394).
There are 558 Melbourne homes scheduled for auction this week, an expected rise of 11.6% on last week’s volumes (500), which saw a large number withdrawn (209); a trend that is likely to persist through the lockdown period.
Across the smaller cities, scheduled volumes are set to be higher across all cities but Perth.
<img src="https://www.urban.com.au/images/2020/7/23/CL%20JULY%2019.JPG" alt="">
Despite the negative speculation surrounding the property market, the Ray White Group is set for another strong weekend of auctions.
A return to online auctions in Victoria has done little to stem buyer confidence and the number of registered bidders for New South Wales properties remain near record highs.
Australasia’s biggest auction house has 240 auctions scheduled to take place this Saturday, a 72 per cent increase in the number of auctions at the same time last year.
One highlight is in Pymble where Ray White Upper North Shore Sales Agents Rowan Lazar and Graeme Schultz are taking the five-bedroom family home at 12 Lawley Crescent (pictured in title) to auction with a $2,250,000-$2,500,000 price guide.
“We’ve had more than 70 parties through the open homes during the campaign and we’ve issued 17 contracts so far – we’re expecting this one to be a great auction,” Mr Lazar said.
<img src="https://f.datasrvr.com/f1/620/64889/5_Hume_Street,_Kellyville_Ridge,_NSW.JPG" width="640" data-imagetype="External">
Over in Kellyville Ridge, Ray White Castle Hill Sales Executives Sara Perry and Karl Anthony are expecting big things for the modern and stylish property at 5 Hume Street (above).
“We’ve had 58 groups through and the property has particularly appealed to a wide-ranging demographic – namely families, downsizers and first-home buyers,” Ms Perry said.
“The vendors have bought a block of land in Box Hill to build their dream home and they’re motivated to sell – we’re expecting 4-6 registered bidders on the day.
The property goes under the hammer onsite at 12pm with Ray White Auctioneer James Kerley.
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j.ballantyne1990-6AQqhLzZaK

Sydney set to be the busiest auction market again due to Melbourne lockdown

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EXPERT OBSERVATION 
Weekly auction results are by far the most timely gauge of conditions across Australia’s housing markets.
For observers of the Sydney and Melbourne markets, a Sunday isn’t complete without checking the weekend clearance rate. That said, to get the right take from these figures it’s increasingly important to apply a few adjustments first. This note gives some quick tips on how to do this and how to judge whether a result really is strong, weak or indifferent.
In interpreting weekly clearance rates, there are two main effects we need to adjust for – ‘early result’ bias and seasonality – and a third aspect that, once incorporated, gives a clearer guide to price conditions. 
Early results skew high 
Unsurprisingly, successful auctions tend to get reported earlier. Patterns depend according to data provider but for CoreLogic, preliminary results are published on the Sunday then a final estimate on the following Thursday. The difference in terms of clearance rates is on average 3pts for Sydney and 1pt for Melbourne. However, the weaker market over the last 18 months has seen more slippage than usual, averaging closer to 5.5pts for Sydney and 1.5pts for Melbourne.
<ul>
<li>So, step one, for preliminary clearance rates, deduct 5.5pts for Sydney and 1.5pts for Melbourne.</li>
</ul>
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/Housing_Pulse/Housing_Pulse_Bites/2019-02/Auctions-2.jpg" alt="">
Seasonality positive heading into Autumn and Spring, negative around Christmas
The time of year also matters. Buyers and sellers come and go from the market at slightly different times, producing a regular ebb and flow to clearance rates as the balance of power shifts. For March this effect is worth about 2pts in Sydney, slightly more in Melbourne. Seasonality diminishes gradually heading into Winter, re-emerges in Spring and then turns sharply negative as buyers disappear over the Summer holiday period.
<ul>
<li>So, step two, take another 2pts off for seasonality (tweaking this as the year progresses). </li>
</ul>
Pre-auction withdrawals an important clue to size of price declines
One of the appeals of tracking auction clearance rates has been the relatively tight relationship with price growth. Generally speaking, clearance rates above 65% were typically associated with solid gains, and over 75% with outright strength, while rates below the 50-55% range were associated with price declines. 
That broad relationship still holds. However, clearance rates do not seem to be capturing the full extent of price weakness during the current correction. The lows seen late last year, in the 45-50% range, are comparable to those in 2011-12 and previous cycles, yet the pace of price declines has been somewhat faster. 
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/Housing_Pulse/Housing_Pulse_Bites/2019-02/Auctions-1.jpg" alt=""> 
Another aspect of the auction results – pre-auction withdrawals – may shed more light on this and provide a way of refining the measure to give a better gauge of price conditions. Historically, around one in eight properties heading to auction in Sydney has been withdrawn prior, with a much lower share – one in thirty – in Melbourne. Both have risen materially over the last year, and much more sharply than during previous downturns. In Sydney, it has been more than one in five and in Melbourne it has been about one in every fifteen.
Pre-auction withdrawals are part of the ‘uncleared’ portion of the clearance rate. However, they are likely a good indicator of a more stressed market. Whereas a passed in result may be due to bidders not taking the price above reserve, a withdrawal points to sellers assessing that there will be insufficient bidders to even justify an auction.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/Housing_Pulse/Housing_Pulse_Bites/2019-02/Auctions-3.jpg" alt="">
How do we allow for us in our quick assessments? One relatively simple way is to calculate the ‘withdrawal rate’ – the proportion of auctions being withdrawn – and adjust the clearance rate by how this is varying to long run averages. For Sydney that adjustment is the clearance rate plus 14pts minus the withdrawal rate. For Melbourne, it is the clearance rate plus 3pts minus the withdrawal rate (the 14 and 3 in these calculations reflect the long run average withdrawal rate in each market).
<ul>
<li>So, step three, adjust both for the withdrawal rate gap to average</li>
</ul>
Conclusion
In summary, three relatively simple tweaks to the Sunday auction clearance rate give us a clearer idea of how they stack up:
<ol>
<li>A mark down for early result bias: currently –5.5pts for Sydney, –1.5pts for Melbourne; 
</li>
<li>An adjustment for seasonality: currently –2pts for both markets; 
</li>
<li>Incorporating pre-auction withdrawals: deducting the ‘withdrawal rate’ gap, the difference between the withdrawal rate and long run averages – for Sydney this is currently –8pts (22% withdrawal rate vs long run average of 14%); for Melbourne it  is –3.5pts (6.5% vs 3%). </li>
</ol>
The resulting ‘adjusted’ clearance rate can be compared against the usual benchmarks (&gt;65% associated with solid price gains, &lt;50-55% associated with price corrections) but gives a better idea of the extent of weakness. 
By way of example, Sydney’s preliminary clearance rate in the last week of February was 58.6% – knocking 5.5pts off for early result bias, 2pts of for seasonality, and a further 0.5pt for the withdrawal gap (14.5% vs avg 14%) gives an adjusted estimate of 50.6%, still a soft result but somewhat improved on the very weak reads late last year. The same adjustment for Melbourne takes a preliminary 53.1% clearance rate down to 50.1%. 
Interestingly, in both cases the main shift in early 2019 looks to be coming from a reduced rate of withdrawals rather than a lift in clearances. That may be an early sign that the pace of price declines is moderating. However, both shifts will need to be sustained and extended before auction market results are consistent with price stabilisation. 
Matthew Hassan<a href="https://westpaciq.westpac.com.au/Article/37494/14186/" target="_blank"></a> is Senior Economist at Westpac.
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Matthew_Hassan-HHWHptmrw4

Matthew Hassan's ‘how to’ guide to reading auction clearance results

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Financial Review Rich List member Geoff Harris has invested a further $1.8 million in online live auction app Gavl, which is developing technology it believes will lead to real-time bidding at auctions.
Australian-owned, Gavl has the fastest live streaming technology in the world.
Harris first invested in Gavl late last year, run by former Hawthorn AFL footballer Joel Smith. The pair met when Harris was a Hawthorn director between 2004 and 2013.
Gavl secured a $2.5 million investment in June 2016 from Harris Capital, which enabled Gavl to live stream its first auction and release its Apple iOS and Android apps.
The current Gavl app allows property buyers and browsers to search a map, select a property that is using the technology and then view its auction either live or later. 
At the auction itself, a tripod is set up with a smartphone to relay the proceedings via the app online.
Gavl is now developing technology that it claims will eventually add digital contract signing, deposit transfer facilitation between buyer and seller via the agent and 360-degree camera and Artificial Intelligence integration.
"We are currently piloting technology that allows a consumer to not only watch, but bid and ultimately buy at auction, and complete the transaction without having to be physically on site," Mr Smith told The Australian Financial Review.
He hopes to have the technology ready next year.
It has the only app dedicated to the real estate industry with a patent-pending technology that can broadcast live events with a one-second latency – this includes Facebook Live, which is commonly used by the industry. 
Joel says when they first tested Facebook Live for auction live streaming, "we were measuring a 5-20 second latency."
"In an auction environment, this delay could be the difference between a property selling for $950,000 and $1.1 million.
"We spent 15 months developing the technology to live stream with a one-second latency as well as address another challenge for agents: network reliability with live streaming, and this technology is key for us in launching live auction bidding.” 
Gavl claims that its technology has now been used by 200 Australian real estate agencies to broadcast 3500 auctions.
The $1.8 million is being invested via the Harris Capital investment office, managed by Mr Harris's son, entrepreneur and philanthropist Brad Harris. 
Mr Harris is still a major shareholder in Flight Centre.
Joel Smith founded Gavl with Leith Donaldson and Michael Artup, launched with a $300,000 bootstrap from Joel and his father-in-law.
 
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Geoff Harris has invested a further $1.8 million in online live auction app Gavl

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There are slightly fewer auctions scheduled to take place across the combined capital cities this week, with 2,986 currently being tracked according to CoreLogic’s latest weekly market report.
The property advisory firm says that in both Sydney and Melbourne, the two major auction markets, auction activity will be down week-on-week, with 1,351 Melbourne auctions scheduled and 1,111 homes set to be taken to auction across Sydney.
Overall activity also remains lower than what was seen over the corresponding week last year.
Outside of Sydney and Melbourne, each of the remaining capital cities is set to see a higher number of auctions this week compared to last week.
The exception was Perth, where auction activity is set to remain steady.
<a href="/images/2016/12/01/Weekly%20clearance%20rate.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/12/01/Weekly%20clearance%20rate.jpg" alt="">
Capital city auctions this week:
• Sydney: 1,111
• Melbourne: 1,351
• Brisbane: 188
• Adelaide: 156
• Perth: 59
• Canberra: 110
St Kilda in Melbourne is the busiest individual suburb for auctions across the nation this week, with 22 residential homes set to go under the hammer.
Reservoir (20), Mount Waverley (19), Craigburn and Glen Waverley (both 17) all of which are in Victoria will also have high numbers of auctions this week.
<a href="/images/2016/12/01/Capital%20city%20auction%20statistics.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/12/01/Capital%20city%20auction%20statistics.jpg" alt="">
The number of auctions increased last week, recording the second busiest week this year, with 3,398 auctions held across the capitals, up from 2,987 the previous week.
The Capital city auction clearance rate remained strong last week despite the increase in auction numbers, final results show 73.0 per cent of auctions were successful.
Last week, Melbourne’s clearance rate was 76.1 per cent, down from 79.4 per cent the previous week.
While for Sydney, final results show that the clearance rate for the city fell to 77.1 per cent from 79.6 per cent the previous week.
Despite that, there were a number of sub-regions where clearance rates came in above the 80 per cent mark.
Across the smaller auction markets, performance was mixed last week, with clearance rates falling in Brisbane, Adelaide and Perth, but improving in Canberra.
The Hunter region was the busiest non-capital city region last week, with 60 auctions, however Geelong recorded the strongest clearance rate at 76.9 per cent.
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Sydney and Melbourne aucton market declines compared to last week: CoreLogic

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It has been another strong week for auction results, with a preliminary auction clearance rate of 77.9 percent, according to CoreLogic's latest monthly report.
There were 2,405 auctions held across the combined capital cities. Auction volumes still remain below levels of last year. The clearance rate has remained above 70 percent since the last week in July.
Last week, the final auction clearance rate was recorded at 76.4 percent with 2,290 residential properties taken to auction.
<a href="/images/2016/10/18/Captal%20city%20auctions.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/18/Captal%20city%20auctions.jpg" alt="">
At the same time last year, auction volumes were higher, with 2,858 capital city auctions held, 67.4 percent were successful.
Sydney’s clearance rate continues to be nation leading, however the number of auctions held is still lower that at the same time last year.
<a href="/images/2016/10/17/Brisbane%20%20Adelaide%20weekly%20clearance%20rate.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/17/Brisbane%20%20Adelaide%20weekly%20clearance%20rate.jpg" width="300">
Adelaide's weekly auction clearance rate has improved compared to last year's. Last year the weekly average for clearance rate was around 55 percent, this year it rose by 10 percent.
Brisbane has seen slight improvement on weekly auction clearance rate compared to last year's. Last year the weekly average was 42 percent while this year it rose to 48 percent.
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