Sydney auction clearance rate slumps to 44.5 per cent with sellers slow to revise expectations

Sydney’s weekend auction clearance rate slumped to a low of 44.5 per cent on Saturday.

The result, from 314 reported auctions, was Sydney’s lowest preliminary clearance rate in a decade, excluding public holiday long weekends. It was also the second week in a row the auction disposal rate has fallen below 50 per cent – a trend that’s pushing the broad mass of the city’s housing sector into buyers’ market territory.

Domain senior research analyst Nicola Powell said the cautious mood among sellers and buyers appeared to be deepening, and clearance rates were reaching a new low.

“It’s highly likely this weekend’s clearance rate will be revised lower, which means it could reach somewhere in the realm of 38-40 per cent,” she said. “The slowing nature of the auction market suggests the downturn has yet to hit a peak with further price softening ahead.”

Throughout the city on Saturday, there were stalemates over asking prices, and some real estate agents on the north shore reported that vendors trimmed their expectations to “2016 levels” to get sales over the line.

Numerous vendors got cold feet at the weekend, with 104 withdrawing properties from auction. This was nearly one in five of the 567 scheduled auctions. The decline in activity followed a preliminary clearance rate of 49.6 per cent on October 13 and 14, subsequently revised down to 45.2 per cent.

Danny Grant, of The Agency North, said realistic vendors were forgetting about last year’s surge in median house prices and reducing their asking prices by about 10 per cent to 2016 price levels.

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“This market is normalising,” he said. “It is abnormal to have 10 or 12 people competing at an auction and prices that go hundreds of thousands of dollars over reserve. Normal is having just a few bidders, and you get to reserve or a little bit more.”

Sydney’s most expensive home sales reported at the weekend were mainly in the north.

At an auction in Pymble on Saturday, Di Jones Real Estate North Shore sold a large single-level house at 19 Bannockburn Road, for $3.35 million, $250,000 above the reserve.

Meanwhile, a house at 43 Spruson Street, Neutral Bay, fetched $3.2 million through McGrath Neutral Bay; and a large single-level apartment at 64a Milray Avenue, Wollstonecraft, changed hands for $3.18 million. Stone McMahons Point was the selling agent.

In southern Sydney, 44 Woodlands Road, Taren Point, sold for $3.07 million through McGrath Sans Souci. In the inner west, a three-bedroom penthouse with water views at 18/18 Oxley Street, Glebe, clinched $2.95 million through City to Surf Property; and an appealing period home on a large corner site at 29 Noble Street, Five Dock, sold for $2.48 million through Belle Property Strathfield. 

Despite the underperforming auction scene, A-grade properties are continuing to sell for good prices, especially in the eastern suburbs.

Market watchers say prospective upgrading buyers are getting their finance and tactics in order for the market in November and December. Many are confident there will be better buying farther up the property food chain.

Buyer’s agent Amanda Bidder-Segers, of Amanda On My Side, said families looking to upgrade to a north shore home in the $4 million to $5 million range were buying at advantageous prices without much competition.

“I say to my clients, ‘If we don’t find the right property, you don’t have to rush’,” she said. “You don’t have that sick feeling of last year where, if you missed out on a home, you knew that the market was going up by $20,000 a week right in front of you.”

One of the best auction sales of the weekend was for a fully renovated house at 5 Fourth Avenue, Willoughby East. The home sold above expectations for $3.13 million through The Agency North.

Grant said the property was given an initial price guide of $2.8 million, but this was upped to $3 million during the campaign.

With about 60 onlookers in the crowd, the bidding kicked off at $2.84 million. Three parties – two downsizers and a family looking to upgrade – competed for the keys, with one of the downsizers, who was keen to move closer to her adult children, winning out.

Downsizers also took home the bacon at Belle Property’s auction of a three-bedroom, two-bathroom terrace at 4 Carlow Street, North Sydney.

The renovated home, with parking for two cars, sold to a more mature buyer under the hammer for $2.48 million. The reserve was $2.45 million, and there were five registered and three active bidders.

The most affordable dwelling reported sold at the weekend was a unit at 13/27 Queen Victoria Street, Bexley. The two-bedroom property made $530,000 through McGrath Brighton-Le-Sands.