Relatively high clearance rates in the past two months can be taken at face value and are not the result of low real estate stock levels, an economist says.

Research by Domain economist Trent Wiltshire indicated this was most likely an early sign of a market turnaround and rising prices, and higher clearance rates were not simply caused by low auction numbers.

“There’s been commentary suggesting that clearance rates have been boosted by the low number of auctions,” he says. “Historically, that hasn’t been the case.”

Wiltshire’s research looked at monthly clearance rates since 2005 and found the opposite to be true; months with more auctions had higher clearance rates.

“Regardless of the number of auctions being held, clearance rates are still a timely and pretty accurate indicator of market conditions,” he says.
This rule might not apply in certain areas of the wider cities, as the property market greatly varies by suburb, he says. “This analysis looks at Sydney and Melbourne as a whole, so there may be suburbs or pockets where low auction numbers have contributed to higher clearance rates and prices.”