Sydney Passed In Rates - What Do They Mean?

A bit of hubbub around today about the rising rate of properties being passed in at auction. It includes quotes such as this one below:

“It’s early days but the greedy vendors are starting to get singed, or their knuckles rapped,” Ms Bakos said.

It was a bit surprising, since clearance rates had risen a little between August and September in Sydney. So I thought I would take a look at how it can be that more properties are being passed in, and yet clearance rates rise. Is it the media manipulation of clearance rates? Is there a conspiracy?

Note that the above uses CoreLogic numbers rather than Domain's.

There are two ways for a property to not be successfully sold in the auction statistics - pass in, or be withdrawn before auction.

What's very clear from the chart above is that the most notable thing that's been happening between August and September is the drop in the number of withdrawals from auction. That's partly offset by the passed in percentage. Leaving us with the slightly higher overall clearance rate.

An obvious explanation might be that with the lifting lockdowns, vendors are becoming more prepared to try their luck at auctions. Particularly in the last week, with in person auctions, the withdrawal rate dipped and passed in rate rose. There could be other interpretations. I'd still be looking at the overall clearance rates for guidance on the market's performance, rather than relying on components that are quite sensitive to lockdowns and reopenings.

About This Image The chart is based on data from the NSW Valuer General and used pursuant to the Creative Commons Attribution 4.0 International License