What is the significance of auction clearance rates

Interested in how people interpret these

Sorry I wasn't thinking when I was typing I meant auction clearance rates

 

An indicator of buyer sentiment.

When clearance rates are above 80%, people are keen to buy and pricing are heading upwards.

Below 60% the market is stagnating. People are very cautious about paying too much or sellers are expecting too much and unwilling to adjust their expectations. Either way the prices aren't going upwards and they may even be on a downwards trend.

 

Are you asking about auction clearance rates or mortgage clearance rates (as per thread title)?

 

I meant auction clearance rates I wasn't paying attention as I was typing

 

Thought so... cause you confused me... just wanted to check....

 

57% auction clearance rate for NSW this weekend.

 

Depends on the market.

 

It is an indicator.

 

As someone who has posted the most Brisbane clearance rates, they still mean nearly nothing. Last figure I read was that 5.8% of listings go to auction. This is a very, very small sample and has nearly no statistical significance. That being said, the trend year on year is still hard to dispute (hasn't been great the last month), but who buys at auction in Brisbane anyway?

 

Victorians?

 

What trend year on year?

 

This one:

 

Price growth tracks clearance rates very closely.

 

I find most indicator's usefulness by themselves is very limited and can tell a false story. It's when you combine multiple indicators together with qualitative data and one corroborates the other is when the data becomes much more telling and useful.

 

Show me a graph for Brisbane only and I will believe this. The auction clearance rate is a sample which represents about 5-8% of the market and mostly properties a certain price range.
Its hovered between 30 and 60% for years.

 

Is that graph saying that sydney in 2014 only had 4% growth?

 

"Three-month-ended price growth"

 

There needs to be enough volume for the indicator to track accurately as it does in Sydney & Melbourne, though wouldn't be surprised if there was a loose fit in other capitals (higher clearance rates during periods of price growth). As @Peter_Tersteeg said in the first reply, it's an 'indicator of buyer sentiment'. No indicator is perfect, but it gives us a good idea (& earliest possible) of what prices are likely to be doing.

 

Gotchya! thanks