Auction market keeps cool as summer heat arrives
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Dec 3, 2018
Auction market keeps cool as summer heat arrives
Attendance was down at auctions over the weekend, as the heat of the first weekend of summer keeps buyers at bay.
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Jellis CraigPictured: 8 Burchett Street, Brunswick. Sold at auction by Rob Elsom and Jimmy Messis, as seen on Luxury List.
Sydney's property market could be headed for an ominous clearance rate of 30 per cent, after another slow weekend for auctions across the nation.
Preliminary results show a combined capital city clearance rate of 47 per cent - the 10th week in a row where less than half of homes taken to auction have sold.
Last week's final clearance rate stood at 41.9 per cent, compared with 60.3 per cent the same time last year.
The lower volume of listings and a lower reported number of registered bidders indicates a further slide in prices, with Sydney having dropped 9.5 per cent since peaking in July last year - double the national average, according to CoreLogic's November hedonic home value index results, released today.
Source: CoreLogic
Commenting on the results, CoreLogic head of research Tim Lawless said, “The downward pressure on national dwelling values is largely confined to Sydney and Melbourne which together, comprise approximately 55 per cent of the value of Australia’s housing asset class,” he said.
Mr Lawless points towards several factors that are influencing the downwards trend in Sydney and Melbourne, while other regions continue to see some level of growth. The tightening in finance conditions has been more pronounced across the investor segment of the market, where Sydney and Melbourne have recorded much higher concentrations of investment demand.
“Additionally, housing affordability constraints are more pronounced in these markets and rental yields are substantially lower, indicating an imbalance between rental values and dwelling values. The ramp-up in housing supply has been more pronounced in these markets against a backdrop of slowing demand, and Sydney and Melbourne have also been more affected by the reduction in foreign buying activity.”
As a consequence of less market activity, advertised listings have surged higher, providing buyers with ample choice which provides for a strong negotiation position on price.
“The rebalancing towards buyers over sellers in Sydney and Melbourne is clear across CoreLogic’s vendor metrics, with clearance rates tracking in the low 40 per cent range while private treaty sales are showing substantially longer selling times and larger rates of discounting than they have over recent years.”
Sydney
There were 927 auctions held in Sydney this week returning a preliminary clearance rate of 50.6 per cent. In comparison, there were 1,035 auctions held over the previous week and the final auction clearance rate was 44.8 per cent.
One year ago, 1,143 auctions were held across the city and the clearance rate came in at 56.2 per cent.
"Some areas are definitely performing better than others. The inner west, North Sydney and Hornsby regions are achieving better than most areas with clearance rates above 60 per cent, meaning as always research into the area you are interested in is the key," REINSW President Leanne Pilkington told WILLIAMS MEDIA.
Brisbane
In Brisbane, a preliminary clearance rate of 40.3 per cent was recorded across 125 auctions.
Auctioneer Justin Nickerson says attendance was noticeably down over the weekend.
"Interestingly the average attendance was down considerably, possibly a reflection of the oppressively hot conditions in Queensland across the weekend," he told WILLIAMS MEDIA.
"The first of the “big 3” December weeks leading into Christmas resulted in another strong week of under the hammer and prior sales in the South East Queensland market. A noticeable change in the buyer sentiment was the desire of many groups to obtain a purchase prior to the Christmas break – a feeling that was echoed by many sellers."
This beautifully renovated Queenslander at 29 Dublin Street in Clayfield was passed in at auction over the weekend.
Listing agent Dwight Ferguson of Ray White Ascot says the home is a true architectural masterpiece.
“This home is a true architectural masterpiece located in one of Clayfield's most prestigious and family-oriented streets,” Ray White Ascot principal Dwight Ferguson told WILLIAMS MEDIA.
Owners Seb and Anna Turnbull purchased the property in 2007 before renovating the home in 2016. Their goal was to keep the cottage-like feel, as well as adding modern elements to bring the home into the 21st century.
“We designed this home to feel ultra-modern and primarily to cater for the busy, young and growing family,” Mr Turnbull said.
Melbourne
In Melbourne, a preliminary auction clearance rate of 45.8 per cent was recorded across 1,381 auctions this week.
“Last week saw a slight improvement in the auction market performance as inner and middle suburbs recorded a 49 per cent clearance rate," REIV President Gil King told WILLIAMS MEDIA.
“Glen Iris led with 10 of 15 listings sold, followed by Glen Waverley, Mount Waverley, and Reservoir with eight sales each.
“Regional Victoria fared better with a 57 per cent clearance rate; all four listings sold in Echuca.”
Related reading:
5 ways to improve your chances of selling by auction in a soft market
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Millennials, single parents, and pensioners the hardest hit by rental stress, says new report
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