So what actually happened?

APM’s widely reported auction clearance rate in Sydney for Saturday 30 November was 80.4 per cent. But is that close to the real rate?

Looking at the data for Sydney from APM, only 510 (483 auctions + 27 withdrawn) actually got reported. So an incredible 392 (902-510) auctions went missing. Of those 510 auctions that did get reported, there were 410 that sold, giving a reported auction clearance rate of 80.4 per cent (410/510).

Using APM’s data, my transparent calculations show the real clearance rate was a decidedly chilly 45.5 per cent (410/902); the lowest clearance rate since 13 April 2013.

AFR Source: Aquasia and APM

Once again there is a huge difference between the reported rate and the real rate. This week it was 34.9 percentage points; the biggest difference since I started collating the data in March 2013.

Of particular interest were the suburbs of Epping, Maroubra, St Ives, Carlingford and Mosman, which according to APM were going to be the most popular suburbs for auctions:

“Epping on the upper north shore will offer the most properties for sale by auction of any Sydney suburb this weekend, with 15 homes scheduled to go under the hammer. Maroubra and St Ives have 10 auctions each followed by Carlingford with nine and Mosman with eight auctions scheduled this weekend."


So once again, what actually happened?

According to APM’s own data, in Epping there were only a staggering six (five sold and one sold prior) reported out of the scheduled 15, in Maroubra it was four (two sold, one sold prior and one withdrawn) out of 10, in St Ives it was four (three sold prior and one passed in) out of 10, Carlingford saw four (two sold and two passed in) out of nine and Mosman saw six (two sold, two sold prior, one passed in and one withdrawn) out of 8.

This brings me to an amazing statistic. Using APM’s data, over the month of November an incredible 1438 of Sydney’s auctions have gone missing. Where have they gone? No one knows.

Put simply, it boils down to this; out of a scheduled 3964 auctions that were expected to take place during November, well over one-third (36.3 per cent) disappeared from the official statistics. That brings a whole new meaning to the term “property search".

While I have been using APM’s data to illustrate my points, it is not only APM’s data that distorts the picture. For example, REINSW’s reported clearance rate for Sydney on Saturday 30 November was 73.2 per cent (327 [sold at auction] + 109 [sold prior] / 327 + 109 + 160 [passed in]).

However, what REINSW’s figures fail to incorporate are the properties that were either withdrawn (63), had their auctions postponed (17) or unreported (a whopping 294). Using REINSW’s figures, I calculate that the real auction rate to be 44.9 per cent (327+109/327+109+160+63+17+294); rather close to the real clearance rate of 45.5 per cent when using APM’s data.

Every week, RP Data’s auction clearance rate also fails to include the unreported number of auctions for its calculations, thus artificially boosting its reported clearance rates.

In the meantime, I will continue to calculate the real auction clearance rates and won’t attach any significance to the clearance rates that get reported. As I said previously, we need to have full transparency in the reported figures. Until this happens, my Impossible Sydney Property Search will continue.


Have a good week.

Regards,

Mark.

Mark Bayley is credit strategist at Aquasia, an independent corporate advisory partnership.

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