Auction numbers fade but Sydney winter buyers still hot

Sydney’s usual mid-winter fade-out continues and although auction numbers are still easing, buyer activity remains solid in a market that remains remarkably resilient.

Over 500 homes are set to go under the hammer this Saturday which will be just below last weekend’s 531 auctions but significantly higher again than the 371 auctioned over the same weekend last year.

Sydney’s inner west returns as the most popular region for auctions this weekend with 75 listed.  Next highest is the upper north shore with 60 followed by the city and east 54, the south 51, the west 49, the northern beaches 46, the lower north 39, Canterbury Bankstown 37, the south west 30, the central coast 25 and the north west with 23 auctions scheduled to go under the hammer on Saturday.

Manly is the most popular Sydney suburb for auctions this weekend with 8 scheduled followed by Blacktown 7, Cremorne and Terrigal each with 6 and a number of suburbs with 5 auctions listed including Surry Hills, Epping, Castle Hill and Turramurra.

The Sydney home auction market bounced back last weekend with buyer activity on the rise despite holiday distractions and recorded its highest result in over a month.

Sydney reported a robust winter clearance rate of 71.5 per cent last Saturday which higher than the 69.7 per cent recorded over the previous weekend but lower than the 75.4 per cent reported over the same weekend last year.

Saturdays result was the highest recorded since the since the 74.3 per cent reported 5 weekends ago on June 3 and although the local market has typically eased into winter it nonetheless continues to defying predictions of a significant decline in activity.

Sydney regions reported consistent results last weekend with all but one recording clearance rates above 65 per cent. Inner suburban, higher priced areas however continue to generally produce strong winter results for sellers.

New home building in Sydney continues to fall and with current housing demand clearly ahead of supply, prices and rents can be expected to keep rising.

Latest ABS data reports that both houses and units have recorded significant declines in planned building activity this year so far with unit approvals down by 2257 or  14.8 per cent less compared to the first five months of last year and house approvals down by 342 or 4.8 per cent fewer on the same this year to date comparisons.

Total capital city home building approvals have also fallen significantly this year so far compared to last year, down by 4154 or 7.7 per cent fewer.  The capitals have recorded a decline of 2599 unit approvals, down 11.6 per cent with house approvals falling by 1555 or 5 per cent fewer than recorded over the same period last year.

Last week the Reserve Bank convened for its regular monthly meeting to determine the direction of official interest rates over June. Following better economic news this month, the Bank predicably decided to leave rates on hold at the record 1.5 percent where they have been since the last cut in August last year.

Optimism is now on the rise regarding the prospects of the national economy that primarily reflects a sharp fall in recent monthly jobless data and better retail sales numbers. Unemployment measures however are a lagging indicator of economic activity and trend retail sales remain relatively insipid. The recent sustained fall in planned home building provides some sobering news for the economy with more work still be done to lift out of the current doldrums.

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson join on LinkedIn and Facebook at MyHousingMarket.