Last weekend the auction hammer officially returned from its holiday break and got right back to banging, with 1,671 auctions held across Australia.

The market welcomed an upswing not just in the volume of auctions but also in the clearance rate, with CoreLogic recording a preliminary clearance rate of 73.9%, the highest since the week ending July 20th last year.

In the words of Tim Lawless, Head of Research at CoreLogic Asia Pacific, “The first major week of auctions this year has been an absolute cracker.” Sydney took out the top spot for highest prelim clearance rate at 76.3%, with the country’s other largest auction market, Melbourne, playing second fiddle (always a bridesmaid) at 71.9% – its highest since the week ending October 8th last year.

CoreLogic’s Weekend Market Summary recorded 562 auctions in Sydney, 603 in Melbourne, 203 in Brisbane, 159 in Adelaide, and 132 in Canberra, the latter of which saw a 52.4% clearance result. For houses sold at auction at the weekend, Sydney recorded a median price of $1,510,500, up from the $1,350,000 recorded over the last auction weekend of 2023.

While the next few weeks should provide us with a clearer picture, it’s a welcome strong start after a year that ended in uncertainty and hesitation. The last week of 2023’s auction season saw capital city auction numbers fall -4.1% due largely to buyer wariness, with a combined capital preliminary clearance rate of 66.8%, according to CoreLogic data.

Of course, the recent news of a decline in inflation from 4.6% in November to 4% in December has likely bolstered buyer confidence, though those projecting imminent rate cuts may have jumped the hammer too early.

On Tuesday, the RBA board left interest rates on hold at 4.35% but said “a further increase in interest rates cannot be ruled out.” Still, many economists remain resolute in their forecasts that we’ll see rate cuts in the second half of this year. The latest rate cut odds, compiled by Bloomberg, suggest a one-in-three chance that the RBA will cut interest rates in May, with that percentage climbing to 85% by June.

Yet if the bank’s latest forecasts have its preferred “trimmed mean” measure of inflation falling to 3.1% by year’s end and only within its band of 3% by June of 2025, cuts mightn’t arrive before then. Again, all speculation, and also why the next few weeks of buyer behaviour will be so interesting. On top of all this, will FOMO again play a starring role in the psyche of buyers (and sellers) as it has done the past few years? Or will its nemesis, FOMM (Fear of Making a Mistake) put a pause on the record-breaking price growth we’ve been witnessing?

While it’s much too early to tell whether this “absolute cracker” of a first week is simply start-of-the-season excitement or something more enduring, the auction circuit has seen an uptick of 26.4% in volume compared to the same period last year. Time will tell, but (at least for now), in the immortal words of MC, “It’s hammer time.”