The term Clearance Rate is generally used to establish if it is a buyer’s or seller’s market.

Clearance rates are expressed as percentages and pertain to the number of properties sold or cleared at auction for any given week or month.

The number of auctions held varies from week to week or month to month and depend on a range of factors like interest rates, the time of year and the number of available properties.

Low clearance rates, for instance 60%, would indicate a declining market due to low auction interest and decreasing house prices, suggesting a buyer’s market.

High clearance rates of 75% and above would indicate that the market is currently favouring sellers.

In Victoria, the REIV calculates the total number of properties sold at auction (or before and after the auction) and divides that figure from the total number of auctions reported.

Weekends where there are more than 1,000 auctions scheduled are often referred to as “Super Saturdays’ in the industry and high clearance rates during Super Saturdays, generally indicate strong buyer demand.

If you are looking to buy or sell, it is worthwhile attending some local auctions so that you can assess comparable properties.

The Clearance Rate is only one of many indicators of property market sentiment and it should be used in conjunction with your own market research.

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