Clearance rates can be misleading

For the weekend just gone, reported clearance rates ranged anywhere from 69% to 85% – depending on who you ask.

• REA: 69% from 947 auctions across Victoria
• Domain: 70% from 761 auctions across Melbourne
• REIV: 85% from 688 auctions statewide
• Jellis Craig: 82% across our 43 offices (all 92 auctions reported) 

So, which is it? And why the discrepancy?

These numbers don’t all measure the same thing. Each source reports clearance rates differently, which makes direct comparisons tricky.

But what does the clearance rate actually tell us? And perhaps more importantly, what doesn’t it tell us?

Timing differences

The REIV only includes sales before, at, or immediately after auction over the Saturday and Sunday.

REA and Domain continue updating their figures throughout the following week to capture sales on Monday, Tuesday, and beyond.

Jellis Craig reports at 5pm on Saturday. By Tuesday, the rate would usually be much higher, as many passed-in properties sell in the 72 hours post-auction.

Withdrawn, not reported, or converted to private sale

Domain includes withdrawn properties in its clearance rate.

REA and the REIV only count auctions that actually went ahead – not those withdrawn, rescheduled, or left unreported.

And this is perhaps the most misleading part: any property that is not reported, withdrawn, rescheduled, or shifted to private sale is excluded from the clearance rate.

Why are properties withdrawn, postponed, or converted? Usually because of lack of buyer interest. These are the ones most likely to pass in, which would drag the clearance rate down if included.

And why would a property not be reported? Most likely because it didn’t sell.

In short, clearance rates under-report properties with limited demand, since they often don’t make it to auction.

Auction selection bias

There’s also a natural tendency for agents to run with auction when confidence is high – when the market is strong, the property is high quality and expected to attract strong demand, or when the vendor’s expectations are realistic.

That means clearance rates often skew toward the “best” properties, while the trickier ones are sold quietly by private negotiation.

Volume matters

Sample size is critical. Any number below 400 auctions is too small to reflect the broader market with much accuracy.

A busy Melbourne weekend has well over 1,000 auctions.

So, how useful is the clearance rate?

Ultimately, the clearance rate is an imperfect measure and inconsistently reported. Taken at face value, it can mislead.

But if you understand its shortcomings, it’s still a valuable tool – particularly for spotting trends over time.

Right now, clearance rates are sitting around 10% higher than the same time last year. In absolute terms, anything over 70% points to a strong market.

In other words, clearance rates tell a story – but only part of it. The real story is what happens street by street, auction by auction.

Feature property: 13 Nicholls Street, Malvern