Sydney auction market bucking the trend
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Mar 4, 2019
Sydney auction market bucking the trend
Preliminary auction clearance rates in Sydney nudged higher, as vendors adjusted their expectations to meet lower prices from savvy buyers.
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Belle Property WollongongPictured: 71 New Mount Pleasant Road, Mount Pleasant. Passed in by Jeremy Hodder, David Scioscia, and Lashay Borg of Belle Property Wollongong, as seen on Luxury List.
Property experts say the rate of price declines could moderate due to a lack of stock, as vendors wait until after the federal election to sell.
It comes after CoreLogic reported vendors are increasingly offering discounts in order to sell.
Over the last three months, the median vendor discount was -5.7 per cent - the largest level of discounting since August 2012.
"The widening gap between seller and buyer price expectations reflects the fact there are fewer active buyers in the market and as a result, vendors that are serious about selling may need to make some sizeable price adjustments in order to sell," CoreLogic's Cameron Kusher said.
Source: CoreLogic
But despite the soft conditions across the country, Sydney's auction market is continuing to show signs of resilience. The city's preliminary clearance rate came in above 60 per cent for the second time this year.
Last week, the combined capital cities saw auction volumes reach their highest so far this year with 2,293 auctions held.
The higher volumes returned a final auction clearance rate of 49.4 per cent, which was lower than the 51.2 per cent the previous week when volumes were lower (1,450).
Sydney
Sydney's preliminary clearance rate was 61.3 per cent on the weekend, according to CoreLogic data.
This was slightly better than last week's final clearance rate of 50.2 per cent.
Real Estate Institute of New South Wales President, Leanne Pilkington says it's a good sign.
"The increased levels of participation in open homes and improved clearance rates of February have continued during the first week in March, indicating that buyers are seeing value in the current price levels and that many vendors are agreeing to meet the market," Ms Pilkington told WILLIAMS MEDIA.
Melbourne
Melbourne's preliminary clearance rate stands at 54.9 per cent.
This was up from last week's final clearance rate of 50.6, which fell as auction volumes increased over the week.
"Inner ring suburbs continue their dominance in the market, hosting 44 per cent of total auction sales," Real Estate Institute of Victoria (REIV) CEO Gil King said.
“Brunswick led with nine sales, followed by Glen Iris, Hawthorn and Richmond with eight sales in each.
“Caulfield South and Southbank recorded a 100 per cent clearance rate from six and four auctions respectively."
Marshall White Director, John Bongiorno says buyers are "playing games".
“I know we are not selling a lot of properties under the hammer at the moment but buyers, I think, are playing games by waiting and trying to negotiate post-auction. It is quite frustrating for the vendors and for the buyers themselves.”
Related reading: Get to know John Bongiorno
Advantage Property Consulting buyer's advocate Frank Valentic says that despite a string of one-bidder and no-bidder auctions over the weekend, first home buyers are most active right now.
"The strongest segment of the market is definitely the first home buyer segment where there were a number of strong auction results. A villa unit in Florence Road, Surrey Hills and one of our Vendor Advocacy apartments in Kellett Street, Northcote had three first home buyers bidding strongly. The first home buyers end of the market is performing as solid as ever," Mr Valentic said.
“Investors have very much deserted the market as first-home buyers and owner-occupiers dominate.”
Smaller auction markets
Brisbane recorded the lowest clearance rate of any capital city market at 32.9 per cent from 94 auctions.
“South East Queensland held its ground for the second consecutive week highlighted by some very competitive auctions," Apollo Auctions Director Justin Nickerson told WILLIAMS MEDIA.
"A headlining sale on Hedges Ave drew over 100 people and 8 registered bidders before selling under the hammer, whilst registered bidder numbers as a whole increased this week.
"The flow-on effect meant that the percentage of bidders actually participating slightly dipped (58 per cent) whilst again a number of properties transacted and sold prior to auction."
Adelaide was the best performing in terms of clearance rate with a 47.9 per cent success rate.
Related reading:
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