The residential auction market has been exceptionally strong over the past two months with high clearance rates, particularly in the Sydney metro region.  Sydney has experienced record clearance rates during this period.  In particular, the first two weeks of May, were 89.1% and 89.2% respectively as recorded by Australian Property Monitors. 

Our company has seen boom-time Sydney Metro clearance rates with the last four consecutive weeks exceeding 90%.  This appears to be attractive for vendors, as the traditional June long weekend auction slump has been seamlessly forgotten, as McGrath’s scheduled auctions for the long weekend have increased by 40% on last year.  

The strength of the auction process can be seen through the notable volume increase in the prestige market, cascading upwards from other price brackets that continue to experience strength.  The amount of McGrath properties priced at over $3 Million and scheduled for auction has increased by 46% for the 8 weeks to April, over last year.  The extra volume of properties has not saturated the market, as the clearance rate has strengthened by 15% for the same period in this sector.

An interesting observation made by some of our auctioneers is that even though the registration numbers are still high in most areas, there seems to be more hesitant buyers and less aggressive bidding at auctions. The participation at auctions is still high, however the aggressive bold bidding, experienced earlier this year, has made way for a more cautious and conservative approach, which we believe is healthier for the market.

As we progress into the winter months it will be interesting to see if vendors take advantage of the current market.  The traditional wait until spring will be tested, as the desire to sell against less competition in July-August becomes the golden triangle of opportunity, with less competition, access to buyers and record low interest rates.