Auction Clearance Rate

The auction clearance rate is the proportion of properties that successfully sell under the hammer at auction, expressed as a percentage. It's reported weekly by major data providers for the capital cities where auctions dominate (primarily Melbourne and Sydney).

The rate is calculated as: properties sold at or before auction, divided by properties taken to auction. "Passed in" properties (no sale) and withdrawn properties are counted in the denominator but not the numerator, which is why clearance rates can dip well below 50% in weaker markets.

Historical context: clearance rates above 70% signal a hot market with strong buyer demand, where auctions typically close at premiums to the guide. Rates of 55-70% indicate a balanced market. Below 55% suggests softening demand and opportunities for negotiation, as many properties end up selling via private treaty after failing auction.

Auction clearance rate is most relevant as a leading indicator for Melbourne and Sydney, where 25-40% of sales go to auction. In Brisbane, Perth, Adelaide, and regional markets, auctions are less common and clearance rates are less informative; days on market and vacancy rate are more useful signals.