What do Auction Clearance Rates Mean for Property Buyers and Sellers?

If you’re thinking of selling your property at auction, you’ll want to know what clearance rates are and how they can affect your sale.

TLDR; Clearance rates are a measure of how many properties are sold during an auction at or above the asking price in a particular market:

• If clearance rates are high, this means that there is high demand for property and prices are likely to be rising.
• If clearance rates are low, this means that there is less demand for property and prices are likely to be falling.

A good clearance rate is 70% or above.

Metric to Measure Market Conditions

Auction clearance rates are a good indicator of market conditions. If properties are selling well at auction, it’s a sign that the market is strong. If clearance rates are low, it could be a sign that the market is weak.

Clearance rates can also be seasonal. For example, clearance rates might be higher in spring and summer because that’s when more people are looking to buy.

Auction clearance rates can vary depending on the type of property. For example, houses typically have a higher clearance rate than apartments. This is because there are usually more buyers looking for houses than apartments.

Some properties might not sell at auction if the reserve price is not met. The reserve price is the minimum price that the seller is willing to accept. If the property doesn’t sell for the reserve price, the property is “passed in” and is usually sold later.

Auction clearance rates can be a good indicator of market conditions, but they’re not the only factor to consider when buying or selling a property. Other factors, such as the type of property and the location, can also impact prices.

What Factors Influence Clearance Rates?

It is also worth noting that not all markets have clearance rate data available. This is often because there are not enough properties sold at auctions in a particular market to provide a reliable data sample. We recommend to rely on other demand indicators for these markets.

It is important to keep in mind that auction clearance rates can vary week-to-week and are affected by the number and quality of properties on offer. A high clearance rate does not necessarily mean that prices are rising, as there may be fewer properties available for sale.

If you are thinking of buying or selling a property, it is worth monitoring auction clearance rates in your area to get an idea of market conditions.

When it comes to real estate auction clearance rates, there are a lot of factors that can affect the outcome. But what does auction clearance rate actually mean?

Auction clearance rate is simply the percentage of homes that sell at auction. This figure is closely watched by industry experts as it can give a good indication of where the markets are heading.

Are Clearance Rates an Important Indicator?

The reason why auction clearance rates are so important is that they can provide a good indication of buyer confidence. If clearance rates are high, it means that buyers are confident in the market and are willing to pay more for properties.

Conversely, if clearance rates are low, it could mean that buyers are nervous about the market and are not willing to pay as much for properties.

So, what factors can affect auction clearance rates?

One of the biggest factors is the number of properties on the market. If there are more properties available, it can be more difficult to sell them all, which can lead to lower clearance rates.

Another factor that can affect auction clearance rates is the type of properties that are being auctioned. For example, if there are a lot of luxury properties up for auction, it can be more difficult to sell them, as there are fewer buyers who can afford to purchase them.

Summary

Auction clearance rates are a measure of how many properties are sold during an auction at or above the asking price in a particular market. If you’re buying or selling a property at an auction, here are the key factors worth remembering:

• Auction clearance rates are a good indicator of market conditions.
• If clearance rates are high, this means that there is high demand for property and prices are likely to be rising.
• If clearance rates are low, this means that there is less demand for property and prices are likely to be falling.
• A good clearance rate is 70% or above.
• Other factors, such as the type of property and the location, can also impact prices.
• Auction clearance rates are not the only factor to consider when buying or selling a property.
• Many markets do not have auctions and have clearance rates reported as 0%, so other metrics need to be considered to measure market conditions