Spring selling season closing fast for Sydney weighed by interest rate increases

Sydney’s spring auction selling season has just five weekends to run but will continue to be tested by record listings.

This weekend nearly 900 auctions are again likely to go under the hammer with another 4000 waiting in the wings over the following month until the Christmas break.

Last weekend 940 auctions were listed which was the third consecutive weekend with auctions exceeding 900 – a first for the Sydney spring market. Although this weekend’s total may just fail to make it an unprecedented four in row above 900, the number will nonetheless present a significant test for a market that has faded sharply over the past month.

The inner west will again host the most auctions this weekend with 132 followed closely by the south with 127, the upper north shore 119, the city and east 80, the lower north, the west and the northern beaches each with 65, Canterbury Bankstown and the south west each with 60, the north west 39, the central coast 35 and the Blue Mountains two.

The most popular suburb for auctions in Sydney this weekend is Chatswood with 12 followed by Ashfield 11, Maroubra, Castle Hill and Moorebank each with 10 and a number of suburbs with nine auctions scheduled on Saturday including Merrylands, St Ives, Leichhardt and Alexandria.

The Sydney home auction market steadied last weekend thanks to an improved performance from inner suburban areas.

 Sydney reported an auction clearance rate of 62.6 per cent on Saturday which was just above the previous weekend’s 59.2 per cent result but well below the 74.3 per cent recorded over the same weekend last year.

Although Saturday’s result was a marginal improvement on the previous weekend it was nonetheless the second lowest recorded since 2012. The Sydney spring auction market has faded rapidly over recent months weighed down by interest rate increases.

Although the market usually tracks backwards as the year ends as a result of typically higher spring auction numbers, this year’s rate of decline has been unprecedented. Sydney began spring with clearance rates approaching 80 per cent but has declined rapidly over the past three months falling by nearly 20 per cent.

Sydney continues to produce dual-speed suburban auction markets with last weekend’s steady overall rate reflecting an improved performance from inner city, higher priced regions. Outer western interest rate-sensitive suburbs however continue to slide and record dramatically low clearance rates.

Trend weekend auction prices continue to increase reflecting more sales from higher priced regions. The latest trend price of $1,176,750 is higher than the previous weekends $1,169,000 and 16 per cent higher than the $1,014,375 trend recorded over the same weekend last year.

Sydney’s inner suburban home auction markets remain firmly in favour of sellers although high listings will continue to provide plenty of choice for buyers over the next five weekends until Christmas. The west, the south west and the north west regions, however, are increasing becoming a raffle for sellers searching for a buyer with clearance rates now heading towards record low levels.

Dr Andrew Wilson is Domain Group’s senior economist @DocAndrewWilson

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