Strength of the vendor mindset and auction bounce to be tested by upcoming super Saturdays

Recent history suggests auction clearance rates ought to decline as the supply increases the further into spring selling season.

It would already appear that auctions in the two major capitals, Sydney and Melbourne are running at around 40% higher than last spring.

And the upcoming October 12 weekend is the first major test of whether buyers are also out in force.

Spring 2013's first super Saturday for Sydney will be October 12, though Melbourne it seems will fall a little short of its 1000 plus qualifying hurdle.

There are 700 plus auctions scheduled across Sydney with around 900 across Melbourne on the October 12 weekend.

The Sydney number will rank as the fourth busiest ever auction day, according to the list from the past few years that Australian Property Data provided me. The 900 for Melbourne falls just outside the APM top 10.  There has only been the one so-called super Saturday so far this year which was the pre-Easter March 23 weekend, but several in a row are likely for the latter weekends of October. There's suggestions the last weekend of October could see some 1500 houses and units put to auction in Melbourne.

Top 10 auction Super Saturdays: Sydney and Melbourne

Sydney Top 10 Melbourne Top 10
Rank Listed for Auction Date Rank Listed for Auction Date
1 751 27 Mar 2010 1 1160 11 Dec 2010
2 745 27 Nov 2010 2 1114 23 Mar 2013
3 735 31 Mar 2012 3 1094 04 Dec 2010
4 686 23 Mar 2013 4 1058 23 Oct 2010
5 665 26 Sep 2009 5 1033 27 Oct 2012
6 650 04 Dec 2010 6 1021 27 Mar 2010
7 645 26 Nov 2011 7 1005 27 Nov 2010
8 642 25 Sep 2010 8 1002 28 Nov 2009
8 642 30 Oct 2010 9 982 12 Dec 2009
10 638 16 Apr 2011 10 962 20 Nov 2010

(Source APM)

It seems despite the election and the school holiday interruption, Sydney auctioneers were very busy in September and for the remainder of the year.

Cooley Auctions reported a 77% September success rate - against 59% last September - with volume up despite one less Saturday because of the fall of the calendar and also the election day.

"Yet despite of these two things we still did a lot more auction," Paul Millett from Cooley Auctions noted.

They already have around 460 auctions booked for October and expect upcoming listing to take it to 500 plus auctions.

By contrast October 2012 had around 350 auctions with the clearance rate at 56%. There are two Saturdays in October where Cooley Auctions have over 90 auctions booked for the day - October 12 and October 19 - with its previous biggest Saturday being 86 auctions.

Rocky Bartolotto at reported his Sydney September auction volume was 90% more than September 2012.

"October 2013 is even bigger as we will do 185% more compared to October 2012," he says.

Sydney's recent stellar run extended to some 12 or so virstual consequitive weekends with a plus 80% weekend success rate, according to Australian Property Monitors.

Just how far into spring the 80% clearance rate holding pattern can go depends would history depend very much on the levels of supply.

Recent history suggests clearance rates ought to decline the further into spring, and then December, as the year progresses and stock levels rise.

Last year Sydney's first three opening weeks of the September spring had a 58% clearance rate. The clearance rate was down to 53% during the first three weeks of December.

The difference arose as there were 460 auction offerings in those early weeks and 760 weekly listings as the season headed into summer.

In 2011 it was 52% in September and down to 49% by December. There were 500 weekly auction vendors at the start which had jumped to 750 by year's end.

The most distinct of seasonal turnarounds came in 2010 when spring began with 63% average clearance rates and by early summer had dipped to 51%.

Melbourne doesn't always follow quite the same path, having enjoyed some enduring auction seasons, but in spring 2010 it went from a 66% opening success rate with 700 listings to a 60% clearance rate with 1000 weekend listings by December.

What is interesting is that the current rise in auction activity is the reverse of the private treaty market.

The latest SQM data puts total online residential listings - down annually during September by 3.7% - at 342,979 across Australia. Sydney has the most substantial yearly decrease in stock levels, falling by 17.6% since last September at 23,576 listings. Melbourne's total listings were down 6.6% for the year to 41,749.

Much of this spring depends not just on the likely jump in auction listings, but perhaps more importantly on just how ambitious the vendors are becoming.

They have seen the headlines of over reserve auction prices - and they might just be listing with that dangerous mindset.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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