Holiday pause for surging Sydney auction market

Sydney’s auction market will pause this Saturday with low numbers of auctions reflecting the distractions of the Queen’s Birthday long weekend.

But the holiday break is unlikely to quell the rising appetite for property by Sydney buyers with the market surging during the past month.

This weekend just under 300 homes are scheduled to be auctioned in Sydney which is predictably well down on the 548 listed last weekend but also well down on the 396 auctioned over the Queen’s Birthday weekend last year.  

Sydney’s upper north shore will host the highest number of auctions this weekend with 46 followed by the inner-west (43), the city and east (36), the west (27), the south (24), the lower-north (22), the south-west (21), the northern beaches (19), Canterbury Bankstown (15), the north-west (12), the Central Coast (five) and the Blue Mountains (two).

Mosman will again be the most popular suburb for auctions in Sydney on Saturday with eight listed, followed by Eastwood with six, Wahroonga and Newtown each with five and a number of suburbs with four auctions listed including Leichhardt, Castle Hill, St Ives and Turramurra.

The Sydney auction market has surged into winter, recording another boom-time clearance rate – the third in the past four weekends. Lower interest rates and rising investor activity are fuelling the local market with signs now emerging of an across-the-board lift in buyer activity. Inclement weather and the federal election campaign have proven to be no distraction to buyers or sellers.

Sydney recorded a clearance rate of 80.1 per cent last Saturday which was well ahead of the 72.4 per cent recorded the previous weekend but down on the 85.1 per cent reported over the same weekend last year.

Buyer momentum is clearly rising in Sydney with three strong results recorded during the past four weekends with the previous weekend’s sharply lower result now looking like an aberration.

Sydney’s suburban regional markets recorded strong or significantly improved results right across the board last Saturday indicating a general lifting of market activity. Most regions were above or close to 80 per cent with the north-west and the west recording their best results in nearly a year.

The Reserve Bank has predictably decided to again leave official interest rates on hold over June following the rate cut announced last month. Official rates will remain at the record low 1.75 per cent with the May rate cut following 11 months with rates on hold. 

Latest economic data remains mixed with concerns continuing regarding the outlook for the local and international economies. Although the latest Australian Bureau of Statistics’ national GDP for the March quarter was generally positive, indications remain of declining prices growth which will likely remain a key concern for the bank.

Although rates are on hold this month, the likelihood remains that the Reserve Bank will again cut rates in the near-term with growing concerns about declining inflation.

Dr Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson

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