Stern tests ahead for softer Sydney market

The softening Sydney home auction market will face stern tests over coming weekends with sharply rising spring listing numbers offering more choice for dwindling buyers  and more competition for sellers.

Nearly 700 homes are set to go under the hammer on Saturday which will be higher than the 649 auctioned in Sydney last weekend and sharply higher than the 567 auctioned over the same weekend last year.

Sydney’s city and east region has the most number of auctions scheduled this weekend with 100 followed by the inner west 87, the upper north shore 77, the lower north 71, the south 70, the northern beaches 62, the west 56, Canterbury Bankstown 44, the south west 30, the north west 37 and the central coast with 27 auctions listed for Saturday.

Maroubra is Sydney’s most popular auction suburb this weekend with 13 listed followed by Mosman 10, Wollstonecraft 9, Surry Hills 8 and a number of suburbs with 7 auctions listed including Kellyville, Cronulla, Pymble, Greenacre, Carlingford and Marrickville.

The Sydney weekend auction market has had its worst start to the spring selling season since 2012 – five years ago – with the local market clearly running out of puff over the last month.

Sydney reported a clearance rate of 67.1 per cent last Saturday which was down again on the 67.9 per cent recorded the previous weekend and well below the strong 80.0 per cent reported over the same weekend last year.

Last Saturdays result was the third consecutive decline in weekend rates and the lowest first weekend of spring auction clearance rate recorded since the 63.9 percent for September 1 2012

Inner-suburban, higher priced regions continue to generally produce the best suburban results in Sydney, but clearance rates in those areas are now consistently lower than recorded over autumn and the early winter market.

After recent mixed results, Canterbury Bankstown was a surprise  regional leader with a robust clearance rate of 75.8 per cent followed by the city and east 74.6 per cent, the south 74.4 per cent, the northern beaches 73.5 per cent, the upper north shore 68.7 per cent, the inner west 67.7 per cent, the lower north sharply down this weekend with just 63.3 per cent, the west 60.0 per cent, the central coast 58.3 per cent, the north west 53.6 per cent and the south west with a clearance rate of 45.5 per cent.

Low and falling interest rates have been a key catalyst that has driven the Sydney home auction market over the past five years. Official rates however have now remained at current levels for over a year with the Reserve Bank deciding predictably to continue its recent stance of steady rates over September

Despite recently declining auction clearance rates, Sydney remains an undersupplied housing market and is likely to continue as such into the foreseeable future.

Latest ABS building approval data for July reveals that the number of houses approved for building over the first seven months of this year remains lower than recorded over the same period last year with the number of unit approvals down sharply by 13.2 percent or 3059 fewer on the same this year to date comparisons.

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson join on LinkedIn and Facebook at MyHousingMarket.