Auction results are a useful guide for evaluating the property market, however it's important to understanding what the figures represent and how they're calculated. Every weekend, a range of real estate organizations publish auction results, which are rarely the same. There are several reasons for these differences in the results. The auction results discussion threads on AustralianPropertyForum.com cover all the latest results from APM, RPData, and the Real Estate Institutes. The APM results are published first, each Saturday evening. Auction results published on Saturday evenings are based on the samples collected during that day, and may be updated over several publications during the following week, while data collection continues. Normally by the middle of the week, the final auction clearance results (after all data has been collected) may differ slightly from the original figures reported on the Saturday.
It is very important to remember that there are many differences in the various methods used to calculate auction clearance rates by each auction results publisher. Essentially, the auction clearance rate is intended to offer a snapshot of the balance between supply and demand in the auction market, which can be a leading indicator for the property market. To describe auction results in the plainest manner, they provide a way of knowing what percentage of homes listed for sale at auction were actually sold on a given weekend. The organizations who collect auction data may also adopt slightly varying geographic definitions for each city that the auction results relate to, which can cause their results to differ (for example, city center vs CBD).
Several outcomes are possible during an auction. The dwelling may be sold under the hammer, sold prior to auction, sold after auction, passed in, or withdrawn from the auction process. The inclusion of some or all of the five potential auction result outcomes in the clearance rate calculation will obviously affect the initial reported auction result. The most appropriate auction clearance rate numerator calculation includes in the sold figure only those properties that actually sold prior to or during the auction itself. Some organizations, including some real estate bodies, include even properties that sold after auction in the total sold figure. This results in a higher reported auction clearance rate. The most appropriate auction clearance rate denominator calculation includes all reported auctions, even those auctions that were initially listed but then withdrawn prior to the arranged auction date.
Most respected organizations include withdrawn auctions in their calculation in order to prevent bias in the clearance rate resulting from properties being withdrawn due to the expectation they may fail. An industry standard auction clearance rate calculation is: (Homes sold under the hammer + sold prior to auction) divided by (total sold and passed In and withdrawn homes) = Final Auction Result. Macquarie Capital Advisers and APM believe there is a historical correlation between auction results and house price growth.
The Reserve Bank of Australia finds a similar correlation at the national level:
Follow the links below for further information on Auction Results:
Australian Property Forum focuses on Australian and global real estate markets, economics, and finance, including house prices, housing affordability, macroeconomics, and the likelihood of an Australian property crash. Does Australia have a housing bubble? Will house prices crash, boom or stagnate? Is it a good time to buy property using a home loan, or better to rent and save the difference? Is rent money dead money? Is the Australian property market a pyramid scheme or Ponzi scheme? Can property values rise keep rising forever? These are the types of question we address on Australia's premier real estate chat site for property bears, bulls, investors and speculators. Whether you're a property investor, first home buyer (FHB) or a happily renting tenant, this site has content for everyone. Additional topics debated on APF include politics, modern monetary theory (MMT), debt deflation, precious metals, generational divides, climate change, sustainability, alternative energy, environmental, human rights and social justice issues, whether or not Australia has a critical housing shortage, versus a glut (oversupply) of dwellings, negative gearing, capital gains tax, land tax, macro prudential regulation, reverse mortgages, debt consolidation, debt management, home insurance, landlord insurance, auction results, auction clearance rates, and all the latest house price news.
Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. Posts on Australian Property Forum may contain links to other websites operated by third parties. These websites are not under the control of Australian Property Forum and APF management is not responsible for their content.
It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. Australian Property Forum members are solely responsible for the accuracy and authenticity of their posts, including any alterations made to posts. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.
This site may contain copyright material the use of which has not always been specifically authorized by the copyright owner (generally, snippets from online news stories). Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.