- A clearance rate between 60% and 70% is considered normal.
- Auction clearance rates above 70% indicate a competitive seller’s market
- Clearance rates below 60% suggest a buyer’s market.
- Factors like location, seasonality, and economic conditions influence clearance rates, making them a useful but limited gauge of market health.
- While they provide valuable insights, auction clearance rates should be viewed alongside other data, such as property prices and time on market, for a fuller understanding of the real estate landscape.
In the Australian property market, the auction clearance rate is a key metric used to assess the strength of property demand and the overall market activity. It refers to the percentage of properties sold at auction compared to the total number of properties listed for auction. Auction clearance rates are widely reported, particularly in major cities like Sydney and Melbourne, where auctions are a common method of selling residential property.
For buyers, sellers, and market observers, the clearance rate provides insights into market conditions and buyer sentiment. This article will explain what an auction clearance rate is, how it’s calculated, and what constitutes a good clearance rate in different market environments. By understanding this metric, you’ll be better equipped to interpret trends and make informed decisions in the property market.
What is an Auction Clearance Rate?
An auction clearance rate is a metric that shows the proportion of properties sold at auction as a percentage of the total properties scheduled for auction in a given period. This rate is often used as a barometer for the health of the real estate market, particularly in cities like Sydney and Melbourne, where auctions are a popular way of selling property. A higher clearance rate typically signals strong demand from buyers, while a lower rate can indicate weaker market conditions.
Clearance rates are typically reported weekly or monthly, giving buyers and sellers a snapshot of how well properties are performing at auction. In a high-demand market, properties are more likely to sell at auction, which pushes the clearance rate higher. Conversely, in a slower market, more properties may pass in or fail to meet the reserve price, lowering the clearance rate. Understanding how this rate reflects the balance between supply and demand is crucial for anyone involved in the real estate market.

How is the Auction Clearance Rate Calculated?
The auction clearance rate is calculated by dividing the number of properties sold at auction by the total number of properties listed for auction, then multiplying by 100 to get a percentage. For example, if 100 properties go to auction and 70 are sold, the auction clearance rate would be 70%. It’s important to note that not all properties listed for auction will be sold on the day – some may pass in, meaning they did not meet the reserve price and may be sold later through private negotiations.
Clearance rates fluctuate based on a variety of factors, including market conditions, the time of year, and location. In hotter markets, more properties tend to sell at auction, while in cooler markets, fewer properties reach a sale at auction, affecting the overall rate. This makes the clearance rate a dynamic and responsive measure of market activity, particularly in auction-heavy cities.
What is Considered a Good Auction Clearance Rate?
A good auction clearance rate in Australia is anything above 70%, signalling a strong seller’s market. In such conditions, there is high buyer demand, and properties are more likely to sell quickly and for higher prices. When clearance rates consistently exceed 70%, it often indicates rising property prices, competitive auctions, and a market where sellers hold the advantage.
On the other hand, when the auction clearance rate falls below 60%, it may signal a buyer’s market, where buyers have more negotiating power, and properties are taking longer to sell. In these conditions, sellers may need to adjust their expectations or be more flexible on price. While a 60% to 70% clearance rate is generally considered balanced, the rate can vary significantly depending on market conditions and location.

How Auction Clearance Rates Reflect Market Conditions
Auction clearance rates are an important indicator of market conditions, providing insight into how confident buyers and sellers are in the current property environment. High clearance rates suggest strong buyer demand, rising property prices, and competitive auctions, which often occur during periods of economic growth or low interest rates. These conditions tend to favour sellers, as properties sell quickly, and often at or above reserve prices.
Conversely, lower clearance rates can indicate a cooling market, where fewer properties are selling at auction and buyers have more bargaining power. This may happen when interest rates rise, lending conditions tighten, or economic uncertainty affects buyer sentiment. In such cases, sellers may need to lower their reserve prices or turn to private negotiations to secure a sale. Monitoring auction clearance rates provides a valuable gauge of the overall health of the property market.
Seasonal Factors Affecting Auction Clearance Rates
Auction clearance rates in Australia are also influenced by seasonal factors, with spring and summer generally seeing higher clearance rates. These seasons coincide with an increase in property listings, warmer weather, and higher buyer activity, which can lead to more competitive auctions. Many sellers choose to list their properties during spring, knowing that buyers are more active, often resulting in a higher clearance rate during this time.
On the other hand, clearance rates tend to drop during the winter months and around holiday periods, such as Christmas and New Year, when fewer properties are listed, and buyers may be less active. Weather conditions, school terms, and major events can also impact buyer attendance at auctions, influencing the final clearance rates. Understanding these seasonal trends helps buyers and sellers plan their timing for entering the market.

Limitations of Using Auction Clearance Rates
While auction clearance rates provide valuable insights into market conditions, they should not be relied upon as the sole indicator of market health. Clearance rates only reflect properties sold at auction, and therefore exclude private sales, off-market transactions, and properties passed in at auction that may sell later. As a result, the clearance rate can give a skewed perspective of the overall market, particularly in areas where auctions are less common.
Additionally, the reasons why properties don’t sell at auction can vary. Some may have unrealistic reserve prices, while others may face competition from more attractive properties on the market. To get a fuller understanding of the property market, clearance rates should be considered alongside other indicators such as median property prices, the average time on market, and broader economic factors like interest rates and lending policies.
Conclusion
In summary, auction clearance rates are a key metric for understanding the health of the Australian property market. A clearance rate above 70% is good, indicating a strong seller’s market and a rate below 60% signalling a buyer’s market. However, it’s important to consider auction clearance rates in the context of other market indicators to get a comprehensive view of the property landscape.
Buyers and sellers alike can benefit from staying informed about auction trends, understanding how clearance rates fluctuate with market conditions and seasonality. Working with real estate professionals and monitoring additional data can help ensure that buyers and sellers make the most of their position in the market.
If you don't want to deal with the hassle of buying a property at auction, you should speak to a buyers agent via the form below. They will help you access off-market properties, negotiate with real estate agents on your behalf, and secure properties before they go to auction, saving you thousands of dollars on the purchase price.
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