Strong auction weekend expected after Sydney records highest preliminary clearance rate in years

Real estate agents are gearing up for another buoyant weekend for Sydney’s property market, after the city’s clearance rate hit its highest level in more than two decades.

Almost 550 properties are scheduled for auction in Sydney on Saturday, a week after the city’s preliminary clearance rate hit a 24-year high, with 88.7 per cent of homes sold under auction conditions.

As of Thursday, the clearance rate had been revised down slightly to 88.5 per cent, following the collection of more auction results.

Strong buyer demand is expected to continue this weekend for the 546 scheduled auctions – up from 408 auctions last Saturday.

“The clearance rate last weekend was unusually strong, as a result of a lower level of auctions being held across Sydney, ” said Domains senior research analyst Nicola Powell.

The auction clearance rate typically fluctuated more at the beginning of the selling season, Dr Powell said, with buyers who missed out on homes before Christmas fuelling demand for the more limited amount of property scheduled for auction after the summer break.

“The opening of the auction season often starts at a higher clearance rate than it ended on the previous year,” Dr Powell said.

While buyer demand and the clearance rate was expected to remain strong, Dr Powell said it would likely fall from its 24-year high in the coming weeks as auction volumes increased.

Damien Cooley, of Cooley Auctions, sold eight out of 10 properties at in-room auctions on Tuesday night – including a Randwick house that drew 10 bidders and sold for $1.3 million above reserve. He expected to see strong buyer activity continue this Saturday.

“Put simply the market is booming. Buyer are being aggressive in the way that they bid. They’re making strong opening bids, aggressive increments, and the confidence in the market is lending itself to confident bidding.”

He noted an eastern suburbs auction scheduled for March had already been brought forward two weeks because the agent had received some 400 inquiries on the house and showed 130 groups through the open home last Saturday.

Given auction volumes are still low, Mr Cooley said the clearance rate would come under more pressure in the coming months as more properties hit the market. However, given the strength of buyer demand he expected the clearance rate to continue to hold in the mid-70s to mid-80s right through to Easter.

“Are pre-Easter [auction bookings] are already very strong,” Mr Cooley said. “There’s more property coming on the market, but the buyer demand is so strong that it will keep clearance rates high.”

“Even the apartment market is starting to pick up.”

While auction volumes are still low, Mr Cooley noted they were higher than this time last year, with 503 auctions scheduled in Sydney on the same Saturday in 2020. according to Domain data.

The city’s inner west will have the most auctions on Saturday, with 103 properties set to go under the hammer in the region. It will followed by the city and eastern suburbs with 84 auctions and the city’s south with 64 auctions.

Ray White NSW chief auctioneer Alex Pattaro is calling eight auctions on Saturday, which he expect will draw an average of 10 bidders a home.

“Based on conversations I’ve had with my agents, we’re expecting another strong clearance rate,” Mr Pattaro said.

Buyers have not being holding back on the auction floor, Mr Pattaro added, noting auctions had been starting off strong in recents weeks, with bid comings in at speed and most auctions done within 15 minutes.

Ray White averaged 8.7 registered bidders at Sydney auctions in January, up from an average of 5.6 bidders last year, with about four people actively bidding an auction.

“The energy in the property market is the best it’s been, definitely in my career at least,” Mr Pattaro said, adding that levels of buyers inquiry and attendance at open homes had been particularly strong.

“March is looking to be a bumper month [for auctions] and with the current levels of buyers hitting the market place we see [these high clearance rates] continuing for the next little while.”