Clearance rates at Australian auctions have dived following the social constraints and uncertainty caused by the coronavirus pandemic, according to a major property data provider.
Corelogic’s latest auction market review shows the clearance rate across combined capital cities was 62.5 per cent from 18,902 auctions in the three months to March.
This marked a drop from 70.3 per cent across 26,923 auctions in the previous quarter but remained more than 10 per cent higher than the same time last year.
Corelogic says the uncertainties around COVID-19, along with tightened restrictions and the banning of on-site and in-room auctions, had hit clearance rates in the past month.
The American firm, which has an Australian headquarters in Sydney, says the clearance rate fell to just 37.3 per cent across the combined capitals in the final week of March.
This came after clearance rates held just above 70 per cent for the last three weeks of February.
Corelogic says substantially fewer auctions than usual will likely be seen in the coming months.
The firm expects some vendors to convert their listing to a private treaty method, while others will pull their property from the market until conditions improve.
The auctions that did proceed will likely use digital platforms such as Gavl or AuctionNow.
Corelogic’s review highlighted that withdrawal rates surged from an average of about 6.0 per cent to 50.2 per cent in the week ending March 29.
The firm’s Australian head of research, Eliza Owen, said the ANZ-Roy Morgan consumer sentiment index plummeted 9.8 per cent in the same week and this indicated rising job losses and uncertainty had dampened property demand.
But she said affordability constraints had already slowed momentum in the property market before the onset of the coronavirus.
“The next few months will present an unprecedented challenge to the auction market and the housing market more broadly,” Ms Owen said.
“However, once the virus is contained, property is looking increasingly better placed for a recovery because of the high levels of monetary and fiscal stimulus available.”