The first week of winter has brought with it chilly clearance rates, but vendors who are prepared to meet the falling market are the ones who are seeing the most success at auctions.

With the biggest auction markets in Australia taking a bit of a breather, now is the time to buy.

While auction volumes remained steady across the combined capital cities, with 2,272 homes taken to auction returning a preliminary clearance rate of 57.6 per cent, national dwelling values dipped by 0.1 per cent  over the month, fueled by weaker conditions in Melbourne and Sydney. Australian dwelling values slipped 0.1 per cent lower in May,  taking the annual change (-0.4 per cent) into negative territory for  the first time since October 2012. 

CoreLogic head of research, Tim Lawless said, “The negative headline growth rate is a symptom of weakening housing conditions across the capital  cities, led by Melbourne and Sydney where previously, capital gains were nation-leading. Sydney and Melbourne comprise  approximately 60 per cent of Australia’s housing market by value, and  40 per cent by number, so the performance of these two cities has a  larger effect on the headline market performance," he said.

Sydney

Sydney was the only other capital city to record a fall in clearance rates, but the "winter effect" - less stock on the market as the main selling season comes to a close, needs to be taken into consideration.

The preliminary clearance rate fell to 52.3 per cent this week, down on last week’s final clearance rate of 56.1 per cent. 

President of the Real Estate Institute of New South Wales (REINSW), Leanne Pilkington, told WILLIAMS MEDIA it was vendors who were prepared to meet the market who saw success over the weekend.

"It's vendors who are prepared to meet the falling market who are selling.  The average discount on prices hit 6 per cent, which is the largest mark down since April 2013, with days on market up to 66 days. The last time Sydney’s clearance rate fell below 50 per cent was briefly over the last week of January in 2016; prior to that was between late 2010 and 2012," she said. 

Melbourne

Melbourne has replaced Sydney as the weakest performing housing market over the past three months, recording a 0.5 per cent fall in values over the month to be 1.2 per cent lower  over the three months ending May. This is the largest decline in  Melbourne dwelling values over a three month period since  February 2012. Melbourne’s housing market was previously looking more resilient to value falls relative to Sydney.

David Napoleone, an agent from BarryPlant, told WILLIAMS MEDIA that buyers are not over-extending themselves. 

This four-bedroom home in Doncaster sold at auction over the weekend for $1.23m through David Napoleone of BarryPlant. View this property on Luxury List.

"Generally, buyers are not extending themselves. We've seen five bidders go down to two, due to the banks tightening up their lending restrictions and the media reporting on the downturn of the market," he said.

"Right now, it's a sellers market. Vendors are selling for a reason, there will always be buyers looking to buy and willing to outbid another buyer. Spring will be the true test of the market," he said.

Holly Gillham, an agent at RT Edgar Toorak, told WILLIAMS MEDIA that while these clearance rates are typical for winter, the demand is still there.

This cute two-bedroom townhouse sold at auction over the weekend through Holly Gillham. View this property on Luxury List.

“Coming into winter, the market gets quieter but there are fantastic properties still available. We had a great result on the weekend, so we're still getting great results. 

"We’re meeting lots of down-sizers who are selling big, beautiful family homes. These types of buyers are very common in these quieter periods.

"We've definitely noticed a decline in Chinese buyers, with the government tightening up rules. There's also been a restriction in younger buyers, as they are having trouble accessing loans. However, the buyers in the top end are still very much there," she said.

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