Source: Domain Research

Key findings

  • Sydney and Melbourne had the highest number of auction listings for the month of February since Domain records began. Clearance rates have continued to slow as a result of increased volumes and reduced competition.
  • For the first time in 21 months, Sydney unit clearance rates have outperformed houses, a reflection of rising investor activity and affordability constraints.
  • Sydney’s median auction house price is up 19.0% over the year to $1.971 million but price momentum has slowed.
  • Melbourne’s median auction house price is up 7.5% over the year to $1.21 million but price momentum has slowed.
  • Canberra’s median auction house price saw an annual increase of 21.1% to $1.09 million.
  • Brisbane’s median auction house price grew by 37.7% over the year.
  • Adelaide recorded its highest auction median for houses since records began, jumping 26.6% over the year, highlighting the continued strength of auctions. Units grew by 18.5%.
  • Clearance rates for units are higher in Sydney, Brisbane, Adelaide and Canberra. Houses continue to outperform units in Melbourne.

Clearance Rates

Clearance rates recorded a monthly increase of 13.8 percentage points in February to 68.4%, the highest since October 2021 but down 12.1 percentage points annually. This is the first month of growth seen in a while after four consecutive months of slowing clearance rates. January is historically a quieter month as there are fewer homes on the market but as auction listings rise, buyers will have more choice which could see the decline in clearance rates at the end of last year continue in 2022. Historically, we tend to see clearance rates bounce early in the year, often producing clearance rates higher than the previous year closed. As auction volumes rise and buyers who missed out last year make their purchases, we are likely to see clearance rates start to soften.

Auction Volumes

In comparison to the previous five-year average for February, volumes this month are tracking 47.4% higher. As the property market picks up the pace for 2022, February saw a significant rise in auction volumes. This month had the highest number of auctions for February since Domain records began, signaling strong seller sentiment continuing in the new year. If auction listings continue on this momentum, it will be the true test of buyer sentiment.

Sold Prior

The number of homes selling prior to auction provides a broad view on the confidence of the market and acts as a leading indicator to price movements. The proportion of reported auctions selling prior to auction day has slightly increased from last year, sitting at 37% and below the 40-45% range seen in lockdown from July to October. The trend of sales occurring before auction day remains higher due to increased choice and reduced competition but the rate of sold prior auctions should continue to ease in the future.

Withdrawn Auctions

The rate of withdrawn auctions increased from last year, sitting at 21%, and above the decade average of 15.6% but this is the third consecutive month of decline. When the number of withdrawn auctions is higher, there is a rise in the number of auction campaigns that are counted as unsuccessful which leads to a negative impact on clearance rates.

Postponed Auctions

The proportion of postponed auctions has fallen month on month to represent 9.8% of all auctions, continuing the downward trend seen at the end of last year after the July peak of 22%. This shows improved market sentiment overall but postponed auctions still remain high compared to the decade-long historical average, which sits at 5.9%. Postponed auctions are expected to continue their decline in the coming months as the auction market adjusts to pre-pandemic auction conditions.

Houses and Units

For the first time in 21 months, unit clearance rates have outperformed houses. The difference is slim, with 3.1 percentage points distinguishing the two. The record growth in house prices seen last year has contributed to the narrowing difference in auction clearance rates as issues with affordability become more apparent. While there continues to be a preference for houses at auction, the relative affordability of units compared to houses is likely to have helped to push unit clearance rates up in February. The historical underperformance of units means that first home buyers and investors will be drawn by the perception of value and the possibility of future growth.

Auction Prices

In February, the median auction price for houses increased over the month to $1.971 million, up 32.7% over the month (noting that January is quiet for auctions) and up 19.0% over the year. The median auction price for units grew 23.2% to $1.1 million over February and is up 14.3% over the year. The house and unit median prices are the highest February medians seen in Sydney since Domain records began.

Domain. 2022. Auction Report – February 2022. [online] Available at: <> [Accessed 10 March 2022].