Every Monday morning, media reports Sydney’s weekend clearance rate. The number becomes headline: “Clearance rate surges to 75%” signals a hot market; “Clearance rate slumps to 58%” suggests cooling conditions.

Vendors watch these numbers to time their sales. Buyers monitor them to gauge competition. Agents reference them in listing presentations.

But clearance rates are more nuanced than headlines suggest. Understanding their calculation, limitations, and proper application makes you a more informed market participant.

How Clearance Rates Are Calculated

The basic formula seems simple:

Clearance Rate = Sold Properties / Total Reported Results

A weekend with 500 auctions where 350 sell produces a 70% clearance rate.

But complications emerge immediately:

What Counts as “Sold”?

Different providers count differently:

• Hammer sales (sold under the hammer at auction)
• Post-auction sales (negotiated immediately after passing in)
• Prior-to-auction sales (contracts exchanged before scheduled auction)
• Vendor bids (does a property that reaches reserve without buyer interest count as “passed in” or excluded?)

These definitional differences explain why CoreLogic and Domain sometimes report different clearance rates for the same weekend.

What’s the Denominator?

The “total” in clearance rate calculations depends on:

• Scheduled auctions versus auctions actually held
• Reporting completeness (not all results are reported promptly)
• Withdrawn auctions (pulled before the day) versus passed-in (failed to sell at auction)

Early Sunday clearance rates often revise significantly by Wednesday as more results come in.

Reporting Lag and Revision

Preliminary clearance rates reported Sunday evening typically revise downward:

• Initial rates reflect early-reporting agents (who often report successful sales faster)
• Late-reporting agents may have more passed-in or withdrawn properties
• Final clearance rates, available mid-week, are usually 3-5 percentage points lower than preliminary

Sophisticated market watchers focus on final, revised rates rather than preliminary headlines.

What Clearance Rates Actually Measure

Clearance rates capture several things simultaneously:

Market Sentiment

High clearance rates indicate buyers are willing to purchase at current prices. Low rates suggest buyers are resisting or vendor expectations exceed what the market will pay.

Pricing Accuracy

Clearance rates reflect pricing realism. Properties priced correctly sell; overpriced properties don’t. High clearance rates suggest agents are setting appropriate expectations; low rates may indicate systematic overpricing.

Competition Intensity

Clearance rates partly measure buyer competition. Markets with many active buyers produce competitive auctions and high clearance rates. Buyer scarcity shows in lower rates.

Listing Quality

Clearance rates aggregate all auctions—quality listings and problem properties alike. Strong clearance rates in one weekend might reflect an unusually high proportion of desirable properties rather than market improvement.

What Clearance Rates Don’t Measure

The metric has significant blind spots:

Price Level

A 75% clearance rate with properties selling 10% below vendor expectations represents different market conditions than 75% clearance rate with properties exceeding expectations. Clearance rate alone doesn’t capture price strength.

Private Treaty Market

Clearance rates only measure auctions. Private treaty sales—still the majority of transactions—aren’t reflected. Markets can have high clearance rates while private treaty days on market extends, or vice versa.

Volume Context

A 70% clearance rate from 300 auctions represents different market conditions than 70% from 600 auctions. Low auction volume might indicate vendor reluctance—itself a market signal that clearance rate doesn’t capture.

Geographic Granularity

Sydney’s headline clearance rate averages across dramatically different markets. Eastern Suburbs at 78% and Western Sydney at 62% produce a combined rate that describes neither accurately.

Seasonal Patterns

Clearance rates show seasonal variation independent of market conditions. December rates often appear low due to auction calendar effects rather than market weakness.

Application for Agents

How should agents use clearance rate information?

Vendor Conversations

Clearance rates provide context for vendor discussions:

“The current market is producing 68% clearance rates city-wide, with your suburb running slightly higher at 72%. This tells us buyers are active, but vendors need to price realistically to achieve sales. Properties meeting the market are selling; overpriced properties are sitting.”

This contextualises recommendations without over-relying on a single metric.

Market Timing Guidance

Clearance rate trends (not single-week numbers) can inform timing:

• Sustained clearance rates above 70% suggest favourable vendor conditions
• Rates consistently below 60% indicate buyer advantage
• Sharp movements (either direction) signal market transitions

Vendors wanting optimal timing should understand these patterns.

Pricing Strategy

Your local clearance rate provides pricing calibration:

• If local clearance rates are high and your listings pass in, you’re overpricing
• If local clearance rates are low but your listings sell, you’re pricing accurately
• Persistent divergence from local norms suggests process issues

Competitive Positioning

Clearance rates feature in listing presentations:

“Our agency achieved 84% clearance rate over the past quarter, compared to 69% for the broader market. This reflects our focus on realistic pricing conversations and buyer engagement rather than taking any listing regardless of vendor expectations.”

Data supports differentiation when it genuinely exists.

Application for Buyers

Buyers can also use clearance rates strategically:

Market Condition Assessment

High clearance rates signal competitive conditions:

• Expect multiple bidders at auctions
• Be prepared to act quickly
• Consider pre-auction offers for serious targets

Low clearance rates suggest opportunity:

• More negotiating room may exist
• Passed-in properties available for negotiation
• Less urgency to commit quickly

Timing Decisions

Buyers watching markets can use clearance rate trends:

• Declining clearance rates may indicate slowing momentum and improving conditions
• Rising rates suggest window of opportunity closing
• Seasonal clearance rate patterns help identify when to intensify search

Auction Strategy

Clearance rates inform auction approach:

• In high-clearance-rate markets, attend auctions ready to compete
• In low-clearance-rate markets, consider post-auction negotiation as viable strategy
• Watch for suburb-specific clearance rates that may differ from city-wide headlines

The Sophisticated View

Clearance rates are useful but imperfect. Sophisticated market participants:

Triangulate across indicators: Clearance rates alongside days on market, listing volumes, price movements, and buyer enquiry data provide fuller pictures than any single metric.

Examine local data: Suburb-level clearance rates matter more than city-wide averages for specific decisions.

Watch trends, not weeks: Single-week clearance rates contain noise. Multi-week trends reveal signal.

Consider composition: What types of properties sold? Which didn’t? This matters as much as the overall rate.

Understand methodology: Know how your data provider calculates clearance rates and adjust interpretation accordingly.

Clearance rates have become the property market’s pulse check. That prominence is somewhat deserved—they do capture meaningful information about market dynamics. But treating them as the only indicator, or interpreting them without nuance, leads to poor decisions.

Smart market participants—agents, vendors, and buyers alike—use clearance rates as one input among several, understood in context and with appropriate skepticism about what any single number can convey.

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Linda Powers consults with real estate agencies on market analysis and vendor communication. Her 25-year career has provided extensive experience interpreting market data in context.