Sydney hits two-year low in auction clearance rates
Sydney’s weekend auction clearance rate has hit a two-year low, with fewer than 60 per cent of homes selling on Saturday.
Added to this, more than 100 vendors got cold feet and withdrew their properties from auctions that were scheduled for December 9.
Saturday’s sales strike rate was well down on the 64.9 per cent clearance rate recorded on the previous weekend and the clearance rate of 65.7 per cent seen on November 25-26. Once late results were collected for the December 2-3 weekend, that weekend’s initial 64.9 per cent clearance rate was revised down to 51.4 per cent. A similar revision process could push this weekend’s results into a below-50 per cent range.
With a 20 per cent spike in spring and summer listings over 2016 listing levels, it’s clear sections of Sydney’s market are being affected by oversupply.
“I have fewer buyers as clients than I normally do at this time of year simply because they are holding off – they are waiting to see what’s going to happen,” buyer’s agent Amanda Segers said.
She said many prospective buyers felt that prices were going to ease back in the first quarter of 2018 and they would then be able to get more for their money.
“The first quarter of the year is going to be telling.”
Ms Segers said lead-in properties priced around $1 million to $1.5 million in the inner-west, the northern beaches and the lower north shore were still performing reasonably well.
“The people who are downsizing, the people having babies and those trying to get into the market are all fuelling the lower end,” she said. “It is the $2 million to $4 million range that is probably going to slow down.”
Inner-west specialist selling agent Shad Hassen, from The Agency, is also seeing a consumer holding pattern.
“People seem to be holding back,” he said. “They are not quite sure why they are holding back but it seems like the right thing to do with the media suggesting that the market is going to change.”
But he said good homes were continuing to sell well in a climate where the key market drivers such as official interest rates and the unemployment rate were unchanged.
He said the readiness of would-be buyers to delay taking decisions was is also being driven by the high asking price expectations of vendors. The combination of the two factors was contributing to the fall in auction clearance rates.
“A lot of owners haven’t adjusted their expectations based on the current climate,” Mr Hassen said.
On Saturday, a terrace house at 23 Lucy Street, Ashfield, drew three registered bidders, two of whom bid.
Planet Properties principal Rita Gibson said the property was passed in and after negotiations, it sold for $2.05 million.
She said the number of people attending open houses was well down on last year, and agents often generated only “a couple of contacts” out of all the inspections they ran for an auction property.
“You’ve got make sure that your vendors are kept really well informed of prices because otherwise the vendors are still up in La-La-land,” Ms Gibson said.
Across town, another property on the water – a 1950s fibro house on a 524-square-metre block at 2 Vaudan Street, Kogarah Bay – also exceeded expectations.
One of very few undeveloped street-to-waterfront sites on level land in the area sold for $3,065,000, which was a whopping $1,065,000 above the $2 million reserve.
Selling agent Rhiff Larkings, from Location Real Estate Sales and Consulting, said nine of 20 registered bidders made bids for the home, which last traded in 1952. The property was bought by a couple from Sylvania who wanted to be closer to their workplaces in the St George area and now plan to build their dream home on the site, he said
The Birchgrove property, at 31 Wharf Road, was contested by five bidders in front of 150 onlookers. The opening bid was $6,175,000.
Belle Property Balmain principal Lynsey Kemp said the house initially had a guide price of $6 million. However, this guide was withdrawn when buyers expressed markedly different views on the property’s value.
Two local families and three out-of-area buyers went after the house, with a young family with school age children coming up trumps at the auction.
“The property is waterfront and it has a massive amount of potential to add value over the years with the beautiful harbour bridge views,” Ms Kemp said.
Other high-priced sales on the weekend included a five-bedroom house at 85-87 Kangaroo Point Road, Kangaroo Point. It fetched $4,305,000 through Ray White Sylvania, while a house at 8 Macquarie Road, Pymble sold for $4,250,000 through Sotheby’s Realty, and a home at 40 Tennyson Avenue, Turramurra, made $4,120,000 through Di Jones Real Estate North Shore.