Are clearance rates really a reliable way to assess the property market?
A good auction clearance rate is generally considered to be 70% or higher, while anything below 60% often reflects a market where vendors may need to adjust their price expectations. While these rates can provide insights into market conditions and buyer confidence, they don’t always tell the full story.
In Melbourne’s current property market, we’ve seen reported clearance rates hovering around 60%. However, when we look closer, the actual figure could be even lower due to several factors that misrepresent the true clearance rate.
Factors That Can Skew Auction Clearance Rates
Volume of Auctions: The number of properties listed for auction each week can influence how reliable the data is.
Pre-Auction Sales: Properties sold prior to auction are included in clearance rates, even though they didn’t go under the hammer.
Post-Auction Negotiations: Properties that pass in at auction but sell shortly afterwards via negotiation are still counted as auction sales.
Campaign Conversions: Properties originally scheduled for auction but converted to private sales aren’t reflected as passed-in properties, skewing the data further.
Why Clearance Rates Are Just One Piece of the Puzzle
Auction clearance rates are a helpful indicator, but they’re not the only metric to consider when buying or selling a property. In many markets, auctions aren’t the preferred method of sale, and other factors like average days on market, price trends, and buyer demand can provide a more accurate picture.
Tailored Advice for Your Property Journey
As vendor advocates, we understand how overwhelming it can be to navigate market data and make sense of conflicting statistics. That’s why we focus on more than just clearance rates. We take a tailored approach to your property sale, prioritising your goals and ensuring your property is marketed to the right buyers in the right way.
Our exceptional track record and strong relationships with Melbourne’s leading agents ensures that our clients consistently achieve incredible results, even in challenging markets.
If you’re a homeowner looking for real, tailored advice from property professionals who prioritise your success, we’re here to guide you every step of the way.