Settling Sydney auction market shuts down quietly after remarkable year

Sydney’s home auction market will close down for  the year this weekend with predictably modest numbers of properties listed to go under the hammer just six days before Christmas Day.

Sydney will host just over 300 auctions on Saturday compared with last weekend’s 733 and significantly below the 395 listed over the same pre-Christmas weekend last year.      

Auction numbers have been well down over December compared with last year as seller confidence has declined with sharply falling clearance rates over spring.

The most popular region for auctions this weekend is the inner west with 45 followed by the upper north shore 39, the south 38, the south west 37, Canterbury Bankstown 34, the northern beaches 26, the city and east 25, the west 22, the north west 20, the central coast 14, the lower north 12 and the Blue Mountains with two auctions scheduled this weekend.

The most popular suburbs for auctions on Saturday are Ashfield and Botany each with eight followed by Epping, Greenacre, Newtown and Marsfield each with six and Carlingford with five auctions listed at the weekend.

December auction activity will be well below last year’s record levels with 500 fewer homes set to go under the hammer over the month. 

The home auction market recorded a marginal improvement last weekend with indications the recent sharp decline in buyer activity may have bottomed out. 

Saturday’s 58.1 per cent clearance rate was just above the previous weekend’s year-low result of 57.5 per cent but still well below the 75 per cent recorded over the same weekend last year. Sydney has now recorded four consecutive weekends below 60 per cent for the first time since July 2012.

Although clearance rates have fallen sharply over spring, consistent results over the past month with rates averaging 57.9 per cent indicate a consolidation of market activity. This will provide some relief for sellers and a platform for a rebound in confidence next year.

The dual-speed market was evident again last weekend with the continuing stark disparity between higher and lower-priced regional results.

Trend weekend auction prices fell again last weekend from the previous weekend’s $1,144,250 to $1,119,025 but are 18.9 per cent higher than the $941,063 trend recorded over the same weekend last year.    

The northern beaches recorded the highest median auction prices for houses last Saturday at $1.69 million, followed by the lower north shore $1.55 million, the city and east $1.5 million, the upper north shore $1.45 million, the north west $1,373,500, the inner west $1,271,000, the south $1,075,000, Canterbury Bankstown $810,000, the west $805,000, the south west $685,000 and the central coast $598,000.

The Sydney home auction is now showing signs of stabilising following a rollercoaster ride of activity this year. The market has fluctuated wildly from record highs over autumn to the lowest clearance rates for over three years to end the year.

Outer suburban lower-priced markets to the west have been clear underperformers in the Sydney spring market shakeout – an outcome influenced by higher interest rates for residential investors.

Latest ABS data for NSW reflects the sharp declines in investor activity following rate rises from July. The value of lending finance to investors fell over October to $5.19 billion, now $2 billion below the record monthly peak of $7.19 billion set in June, four months ago.

Dr Andrew Wilson is Domain Group’s senior economist

@DocAndrewWilson

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