Auction volumes are rising unusually for this time of year in a possible sign that the accumulated weight of 12 interest rate increases is forcing buyers who are unable to keep up with borrowing costs to put their homes back on the market.
An “unseasonal rise” lifted the number of scheduled auctions to 1518 for the week to Saturday, from 1428 a week earlier, and was likely to increase over the coming week to 1850 auctions, data provider CoreLogic said on Sunday.
“One thing it could be is the long-awaited rise in distressed selling,” AMP Capital chief economist Shane Oliver said.
The three-bedroom house at 52 Northcote Street, East Brisbane, sold at auction for $1.47 million on Saturday.  
“The combination of further rises in variable rates but particularly the ongoing transition of people from fixed to variable, or fixed to much higher rates could be starting to show up in increased listings.”
The Reserve Bank of Australia has lifted the benchmark lending rate 12 times in its past 14 meetings from a record-low 0.1 per cent to 4.1 per cent, sending commercial lending rates soaring for buyers with mortgages with low fixed rates that are now expiring.
Demand is still holding up – nearly three-quarters of homes going to auction sold over the week to Saturday in the east coast-dominated national market – with the preliminary clearance rate slipping to 72.3 per cent from 74.5 per cent a week earlier, a figure later revised down to 68.4 per cent.
Sydney had the highest clearance rate at 74.9 per cent, down from a preliminary figure of 75.6 per cent a week earlier, with 564 scheduled auctions, well down on the previous week’s figure of 676.
“The dip in the preliminary clearance rate seems to be driven by a
lack of vendor confidence, with the withdrawal rate rising to 12.7 per cent
while the portion of properties passed in at auction fell to 12.4,” CoreLogic said.
The NSW capital was still getting strong results, however. A six-bedroom house on 1333 square metres in the upper north shore’s Pymble sold for $4.33 million at auction on Saturday, $380,000 over reserve.
Young families were competing for the 3 Warrabri Place home, Ray White agent Jessica Cao said.
“At the start no one wanted to bid, it started at $3.5 million with two bidders taking it up to $3.85 million, and then it started to gain momentum,” Ms Cao said.
“As soon as it hit the reserve, two new bidders jumped in straight away and bidding took off. Within 20 seconds it had gone up to around $4.2 million. In the end, there were two buyers who fought it out, it went down to $1000 bids in the end.”
In Melbourne, the preliminary clearance rate rose to 74.3 per cent from 72.8 per cent a week earlier, with the number of scheduled auctions lifting to 636 from 571.
A five-bedroom house in the south-eastern suburb of Cheltenham sold $130,500 over reserve for $1,480,500 in an auction in which four bidders competed for the 1980s home that offered plenty of space for families, agent and auctioneer Angela Limanis said.
“Even though the house needs a little bit of updating, it’s really solidly constructed and buyers saw past that to the potential the home offered in the future,” Ms Limanis said of the 27 Renowden Street home.
In Brisbane, which reported a clearance rate of 59.8 per cent based on the reported results of 102 scheduled auctions, a three-bedroom traditional Queenslander-style home on 407 square metres sold for $1.47 million to a young couple from Sydney in an auction that drew 28 registered bidders.
“It was called on the market at $1.375 million,” said The Agency sales agent Madi Roche of the 52 Northcote Street, East Brisbane, house, which was put to market by a long-term investor owner.
“The reserve was lower than that but bidding was so competitive that there wasn’t an opportunity to call it on the market before that time.”
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