Auction clearance rates are in the headlines a lot lately, so what do they mean for Central Coast property buyers? Every week a new percentage gets reported across the news and property portals and it gets treated as a snapshot of the entire market.
It’s a useful number, but only if you understand what it’s measuring. Most Central Coast suburbs sell through private treaty, not auction, so a clearance rate headline built on Sydney auction data won’t tell you much about what’s happening in our local market.
What is a clearance rate?
A clearance rate is the percentage of properties that sell at auction out of the total number of auctions held in a given period. If 100 properties go to auction in a week and 70 of them sell, whether under the hammer, just before, or just after, the clearance rate for that week is 70%.
It is reported as a way to gauge buyer sentiment. A high clearance rate suggests strong demand relative to the number of homes on the market. A low clearance rate suggests the opposite, with more supply than the current pool of buyers can absorb.
How it is calculated
The basic formula is straightforward: the number of properties sold at auction divided by the total number of auctions reported. Where it gets more complicated is in what counts as a sale and what counts as a reported auction.
Most data providers include properties sold prior to auction and those sold shortly after in the “sold” figure, alongside sales made on the day itself. Withdrawn auctions are generally excluded from the calculation altogether, since they never went through a full campaign. Passed-in properties, meaning those that reached auction day but did not sell, are usually counted in the total but not in the sold figure, which pulls the rate down.
This is also why you will sometimes see two different clearance rates reported for the same week. The figure released on a Saturday or Sunday is preliminary, based on whatever results have been reported in by that point. The final figure, published a few days later once all agents have reported their results, is often lower. If you are reading clearance rate data, it is worth checking whether you are looking at a preliminary or a final number, since the gap between the two can be a few percentage points.
What the numbers actually mean
As a rough guide, a clearance rate above roughly 70 to 75% points to a seller’s market, where demand is outpacing supply and buyers are more likely to be competing for the same properties. A rate below around 60% suggests a buyer’s market, where there is more room to negotiate and less pressure to move quickly.
Anything in between is generally read as balanced, where neither side holds a clear advantage. These thresholds shift over time and vary by region, so they are best used as a general guide rather than a fixed rule.
Why clearance rates are worth paying attention to, and where they fall short
For buyers, a clearance rate can offer a useful read on how much competition to expect at auction and whether it is a market where you can afford to take your time. A consistently high clearance rate in an area you are looking at is a signal to have your finance and due diligence sorted well before auction day, since properties are likely to sell quickly and at or above expectations.
That said, clearance rates have real limitations. Auctions make up a relatively small share of total property sales nationally, with the majority of homes changing hands through private treaty instead. On the Central Coast, private treaty sales are common across most suburbs, so a Sydney-wide clearance rate headline does not always reflect what is happening locally.
Clearance rates are also skewed toward certain property types and price points, since auctions are more common for higher demand houses in tightly held areas than they are for units or outer suburbs. And because the data is self-reported by agents, results can vary between providers and are not always complete.
What this means for you as a buyer
A clearance rate is a useful starting point, not a complete picture. It tells you something about sentiment at a point in time, but it will not tell you what is happening on a specific street, in a specific price bracket, or with a specific type of property. That level of detail comes from tracking comparable sales and understanding the conditions in the suburbs you are actually interested in.
This is where having someone across the local market day to day makes a real difference. Our team follows auction results and private treaty sales across the Central Coast in real time, and we are always happy to talk through what the current numbers mean for the area and property type you have in mind.
Right now is a great opportunity for first home buyers on the Central Coast, read why here.