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What is the significance of auction clearance rates

Discussion in 'General Property Chat' started by Whitecat, 12th Dec, 2015.

  1. Whitecat

    Whitecat Well-Known Member

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    Interested in how people interpret these

    Sorry I wasn't thinking when I was typing I meant auction clearance rates
     
    Last edited: 13th Dec, 2015
  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    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.
     
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  3. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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

    Whitecat Well-Known Member

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

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Thought so... cause you o_O confused me... just wanted to check....
     
  6. larrylarry

    larrylarry Well-Known Member

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    57% auction clearance rate for NSW this weekend.
     
  7. HUGH72

    HUGH72 Well-Known Member

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    Depends on the market.
     
  8. The Y-man

    The Y-man Moderator Staff Member

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    Fixed :)

    The Y-man
     
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  9. dabbler

    dabbler Well-Known Member

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    It is an indicator.
     
  10. Bran

    Bran Well-Known Member

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    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?
     
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  11. HUGH72

    HUGH72 Well-Known Member

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    Victorians?:p
     
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  12. Whitecat

    Whitecat Well-Known Member

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    What trend year on year?
     
  13. Bran

    Bran Well-Known Member

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    This one:

    Screen Shot 2015-12-14 at 5.53.33 am.png
     
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  14. Bullion Baron

    Bullion Baron Well-Known Member

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    Price growth tracks clearance rates very closely.

    RBA-auction-clearance-rates.jpg
     
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  15. Leo2413

    Leo2413 Well-Known Member Premium Member

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    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.
     
  16. HUGH72

    HUGH72 Well-Known Member

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    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.
     
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  17. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Is that graph saying that sydney in 2014 only had 4% growth?
     
  18. Bullion Baron

    Bullion Baron Well-Known Member

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    "Three-month-ended price growth"
     
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  19. Bullion Baron

    Bullion Baron Well-Known Member

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    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.
     
  20. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Gotchya! thanks