Prestige market holds up amid one of lowest auction clearance rates in 10 years
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Jul 16, 2018
Prestige market holds up amid one of lowest auction clearance rates in 10 years
While it was a slow weekend for auctions across the nation, with one of the lowest clearance rates in ten years, there is still "plenty of heat in the luxury end of the market".
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LJ Hooker Drummoyne87 Renwick Street, Drummoyne sold at auction for $2.5m through Shane Sullivan and Ben Horwood of LJ Hooker Drummoyne. As featured on Luxury List.
It was expected to be a quiet weekend for auctions across the combined capital cities and the results certainly speak for themselves.
There were 1,172 homes taken to auction across the combined capital cities this week, returning a preliminary auction clearance rate of 55.8 per cent.
Last week, 1,411 auctions were held and the final clearance rate was unchanged over the week at 52.6 per cent.
Over the same week last year, auction volumes were higher with 1,627 homes going under the hammer across the combined capital cities, returning a success rate of 69.4 per cent.
The weighted average has remained within the low to mid 50 per cent range for 9 consecutive weeks now, and auction volumes have trended lower over each of the last 4 weeks.
Source: CoreLogic
Sydney
There were 403 Sydney auctions this week returning a preliminary auction clearance rate of 52.4 per cent, compared to 50.1 per cent across 552 last week, and 69.2 per cent across 609 auctions one year ago.
Chris Wilkins, of Ray White Drummoyne, said a "lack of urgency and a degree of pressure all centred around buyers is placing attention on reserve prices and sellers expectations."
"This is being driven in part by the Banks and their stricter borrowing constraints being placed on buyers which is reducing the approval levels and hence limiting buyers ability to bid as their budgets are being reined in," he told WILLIAMS MEDIA.
87 Renwick Street, Drummoyne sold at auction for $2.5m through Shane Sullivan and Ben Horwood of LJ Hooker Drummoyne. As featured on Luxury List.
"We should remember that as buyers and sellers looking to buy and sell in the same market, this is all relative, and from a sellers point of view, unless we purchased what we are looking to sell now only within the last few years then then the capital growth with still be somewhat in the range of 40-60 per cent up over the past seven years.
“Buyers are happy to wait for the right one and are not making concessions,” Wilkins said.
"Market watchers say the peak of the five-year plus boom market in Sydney was autumn last year. Except for the best properties, sales have been on a downward trend since.
Wilkins said there still seems to be some heat in the luxury market, with waterfront and trophy property around Sydney still selling well.
This includes areas like Drummoyne, Abbotsford, Hunters Hill and Woolwich.
87 Renwick Street, Drummoyne sold at auction for $2.5m through Shane Sullivan and Ben Horwood of LJ Hooker Drummoyne. As featured on Luxury List.
Melbourne
Melbourne maintained its auction leadership with a preliminary auction clearance rate of 60 per cent across 560 auctions this week.
This was up from 56.1 per cent across a higher 631 auctions last week. One year ago, the clearance rate was a stronger 74.9 per cent across 756 auctions.
“Three houses – one each in Lower Plenty, Aberfeldie, and Richmond – fetched more than $2.2 million," Real Estate Institute of Victoria CEO, Gil King told WILLIAMS MEDIA.
“Apartments in Port Melbourne and Nunawading exchanged hands for more than $1.1 million.
62 Vida Street, Aberfeldie which sold at auction over the weekend for $2.42m through Leigh Chant of Randina Real Estate. As featured on Luxury List.
“At the bargain end of the market, one buyer in Mernda secured a house for $392,500, while another secured an apartment in Glen Huntly for $275,000," King said.
Jeremy Fox, Director of RT Edgar told WILLIAMS MEDIA that while auction clearance rates are fairly typical for this time of year, there are some amazing properties yet to hit the market.
"The market is levelling out at the moment, and it will play catch-up and rise again. We are still selling heaps of excellent property and there are still plenty of buyers for all these houses.
"I think at the moment, there is a shortage of stock. Unless they really need to sell, vendors will just pull back and take their houses off the market and wait," Fox told WILLIAMS MEDIA.
"Good properties always perform well."
Meanwhile, results across the smaller auction markets were varied last week, with 67.5 per cent of homes successful at auction in Canberra, while Brisbane returned a preliminary clearance rate of 36 per cent.
Related reading:
Slowdown in clearance rates not necessarily an indication of the market
Premium suburbs are leading the recovery of the Perth housing market
Savvy homeowners cash in on high capital growth suburbs in Brisbane
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