Buyers gain upper hand for first time in three years

The balance of power is now clearly shifting towards buyers for the first time in three years.

On Saturday, 822 homes are scheduled to go under the hammer as spring vendors flood the market. This is only just below the all-time record September Saturday of 840 auctions set last weekend.

Sydney has listed 2477 Saturday auctions over the first three weekends of September, almost 50 per cent more than the same period in 2014, providing buyers more choice.

It’s likely this will only get higher as buyers claw back some strength in the market – next weekend up to 1000 homes are set for auction in what will be the first Super Saturday of spring.

Buyers and sellers will be watching carefully this Saturday at whether the clearance rate holds above 70 per cent. Last weekend the clearance rate was 72.9 per cent, a drastic shift from 2014 when clearance rates were approaching 90 per cent.

The Sydney weekend home auction market tumbled again last weekend with weaker results from outer suburban areas continuing to drag the market down. It was the weakest result recorded so far in 2015 and the lowest in Sydney for three years.

The inner west will clearly host the highest number of auctions of all the suburban regions on Saturday with 139 listings.

Next highest is the upper north shore with 112 followed by the south with 105, the city and east 90, the lower north 72, the south west 66, the west 64, the north west 58, the northern beaches 49, Canterbury Bankstown 44 and the central coast 23.

The leading suburb for auctions this weekend is Mosman, with 17, followed by Chatswood 10, Baulkham Hills, Bexley, Surry Hills and Randwick each with nine and Ashfield and Leichhardt, each with eight auctions.

Higher clearance rates from inner-suburban areas continue to impact the Sydney home auction price trend with last weekend’s result of $1,133,750 up from $1,121,375 the previous weekend. This is well above the $969,375 trend recorded over the same weekend last year.

Lower clearances rates in Sydney may reflect the recent action by banks at the direction of financial regulators to tighten lending conditions for local investors.

Latest ABS data reported that the value of lending for residential investors fell sharply in NSW by 9.6 per cent over the month, but remains 30.1 per cent higher over the first seven months of this year compared to last year.

Less local competition for new residential investment properties may, however, be particularly welcomed by rising numbers of foreign investors who continue to be strongly attracted to Sydney property.

Reduced activity from investors will not be welcomed by Sydney tenants with continued strong competition for available rental properties reflected by Domain Group’s house vacancy rates for August tightening to a low 1.8 per cent.

Dr Andrew Wilson is Domain Group Senior Economist Twitter @DocAndrewWilson

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