Heat rising in Sydney auction market as city faces Autumn auction test

The Sydney weekend home auction market heads into autumn with rising momentum set to encourage sellers over coming months.

Higher clearance rates over February, however, have yet to translate into an increase in auction listings with sellers remaining on the sidelines.

Just over 550 homes are set to be auctioned this weekend which will be below the 648 auctioned last weekend and also again below the 681 listed for auction over the same weekend last year. 

Over the past five weekends, 2393 homes have been listed for auction, which is 608 fewer or a fall of 25.4 per cent compared to the 3001 listed over the same period last year.

Sydney reported a clearance rate of 76.9 per cent last weekend which was just ahead of the previous weekend’s 76.8 per cent and again the highest result for the year and the highest since last September. Although last Saturday’s rate was well below the 85.5 per cent recorded over the same weekend last year, the Sydney market continues to generally favour sellers.

Last Saturday’s year-high result was also notable given the surge in auction numbers compared to the previous weekend that provided the market with its biggest test of the year so far – and one that it easily passed. 

Inner suburban, higher-priced regions are leading this year’s Sydney home auction market charge with lower-priced outer suburbs weaker by comparison – although most still producing reasonable results for sellers. 

The city and east will host the most number of auctions in Sydney this weekend with 86 followed by the inner west 83, the upper north shore 82, the south 68, the northern beaches 53, the lower north 52, Canterbury Bankstown 37, the south-west 33, the west 30, the north-west 22 and the central coast 17.

Epping is the most popular suburb in Sydney for auctions this weekend with 10 followed by Surry Hills with nine, Leichhardt and Manly each with eight, Mosman and Randwick each with seven and a number of suburbs with six auctions scheduled including Ryde, St Ives, Drummoyne and Kensington.

Low interest rates are a key catalyst of continuing solid housing market activity in Sydney with the Reserve Bank having decided this week to again leave rates on hold over March. Rates have now been steady at the record low 2 per cent for 10 consecutive months although the prospect remains for a near-term cut. 

Recent economic data has been disappointing with the ABS national unemployment rate back up to 6 per cent, wages growth the lowest on record and the confirmation that the peak of the home-building boom has clearly passed.

A sustained period of unemployment above 6 per cent would probably motivate the bank to cut rates in an attempt to stimulate an increasingly lifeless economy.  

Dr Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson

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