Auction Clearance Rates Are Important… But They’re Not the Whole Story
Over the past few weeks, I’ve had a number of conversations with homeowners asking the same question:
“Auction clearance rates are only around 43% right now. Does that mean auctions aren’t working?”
The short answer is: not necessarily.
Auction clearance rates are one of the most widely reported property market metrics, but they’re far from the only indicator of market strength, buyer demand, or the effectiveness of a selling strategy.
In fact, focusing solely on clearance rates can sometimes paint an incomplete picture.
What Does a 43% Clearance Rate Actually Mean?
A clearance rate of 43% means that approximately 43% of properties are selling either prior to auction or on auction day.
At first glance, that figure might seem low when compared to the boom markets of previous years. However, market conditions have changed, and sellers need to look beyond a single statistic to understand what’s really happening.
What About Registrations at Auction?
One of the key metrics that often gets overlooked is the number of registered bidders attending auctions.
Registration numbers provide valuable insight into buyer appetite and competition levels.
You can have a market where clearance rates aren’t exceptionally high, yet there are still multiple buyers actively competing for quality properties. Strong registration numbers indicate buyers are engaged, inspecting homes, conducting due diligence, and preparing to purchase.
That’s an important signal of market health that doesn’t show up in the headline clearance rate figures.
How Is the Private Treaty Market Performing?
Another interesting statistic emerged this week from a major Sydney real estate group.
While auction clearance rates were sitting at approximately 43%, they reported that only 33% of their private treaty listings were selling within the first 30 days.
That’s a fascinating comparison.
What it suggests is that, despite the headlines surrounding lower auction clearance rates, auction campaigns are actually producing sales more quickly than many private treaty campaigns.
Properties sold through auction are either selling before auction day or within a defined campaign period, typically around 28 to 30 days.
Meanwhile, a significant proportion of private treaty listings are remaining on the market beyond that same timeframe.
Auctions Still Create Urgency
One of the key advantages of the auction process is that it creates a deadline.
Buyers know exactly when a decision needs to be made, which often encourages stronger engagement and more decisive action.
Private treaty campaigns can certainly work well in the right circumstances, but they can also allow buyers to delay decisions, continue shopping around, and wait for price reductions.
In a transitioning market, that sense of urgency can be incredibly valuable.
There Is No One-Size-Fits-All Approach
The reality is that every property, every seller, and every market segment is different.
The decision between auction and private treaty should consider factors such as:
– The type of property being sold
– Current buyer demand in that price bracket
– Competition from similar properties
– The seller’s timeframe and objectives
– Local market conditions
– The level of buyer enquiry and inspection activity
That’s why relying solely on auction clearance rates can be misleading.
The Metrics That Matter Most
When assessing market conditions, I encourage sellers to look at a combination of factors:
– Auction clearance rates
– Number of registered bidders per auction
– Attendance levels at inspections
– Days on market
– Private treaty sales performance
– Buyer enquiry volumes
– Competition levels among active buyers
Together, these metrics provide a much clearer picture of what’s really happening in the marketplace.
Thinking of Selling?
If you’re considering a move and wondering whether auction or private treaty is the right strategy for your property, I’d be happy to have a conversation.
Every property deserves a tailored approach, and understanding the current market data can help ensure you’re choosing the strategy that gives you the best possible outcome.
If you’d like to discuss your plans or gain a clearer understanding of current buyer behaviour in your area, feel free to get in touch.
