How do auction clearance rates affect the market?

Clearance rate is calculated each weekend by major research desks based on auction results reported by selling agents. It's the share of properties auctioned that sold under the hammer or shortly after (within 5 business days), passed-in properties + withdrawn properties count against the rate.

Interpretation: above 70% clearance, sellers have pricing power, properties typically sell at or above expectations, agents push aggressive guides. 60-70% is the historical norm and indicates a balanced market. Below 60% means buyers have leverage, many properties pass in, sellers negotiate post-auction at lower prices.

Caveats: clearance rate is volume-sensitive. A 75% rate on 100 auctions is more reliable than 75% on 20. Smaller capitals + summer holiday periods (December-January) have low volume and noisy clearance figures. Median sale price + days-on-market are complementary indicators.

Use it as: a directional signal for negotiation tactics. In strong markets (>70%), you're competing, bid-or-walk auction tactics work. In weak markets (<60%), patience pays, wait for properties to pass in, then negotiate from the seller's reduced expectation.