Sydney auction numbers surge as sellers return to market

Sydney’s property market is set to face its first big test of the year on Saturday, with almost 1000 homes scheduled to go under the hammer.

There are 942 properties scheduled for the bumper auction day, an 85 per cent increase on the 510 homes up for grabs last Saturday. 

Much of the action will take place in the city’s eastern suburbs, where a whopping 186 auctions are scheduled, but buyers will also be spoilt for choice in the inner west where there are 143 homes for sale.

Among the sea of nervous sellers will be Erskineville homeowners Michelle Forwood and Trevor Fortune, who are bidding farewell to their home of more than a decade to relocate to Tasmania. 

“I’m terrified about auctioning off our home, it’s not something you do everyday and it’s definitely a bit daunting,” Ms Forwood said. “But we’ve had a lot of interest … so I’m hopeful.”

Nearly 130 groups have inspected the two-bedroom home at 186 George Street and selling agent Brad Gillespie of The Agency is expecting 10 registered bidders.

“We’ve definitely seen a lot more activity from buyers in the new year,” he said. “If vendors’ expectations align with market, the new market, they’ll sell … if they’re trying to grab prices from 12 or 18 months ago, that’s not going to happen.”   

Rather than risk going to auction, some vendors have decided to make a deal with about 120 selling prior to Saturday.

• Related: Sydney auction market ‘jump starts’
• Related: Softening market ‘dragging down auction numbers’
• Related: House prices fall in Sydney’s inner west

Over the year to December the median house price in the inner west fell 2 per cent to 
$1.61 million, according to Domain Group data. On the lower north shore prices also dropped, falling 2.3 per cent. 

HSBC chief economist Paul Bloxham attributed the cooling market to a triple whammy of a pullback in foreign buyer demand, increased supply – particularly of apartments – and tightened prudential settings.

“We expect the Sydney market to stabilise, after a few months where there have been modest housing price falls,” he said. “We are forecasting Sydney housing price growth of 2 to 4 per cent in 2018 as a whole.

“We expect a modest lift in [auction] activity as the effect of the tighter prudential settings wears off and we are seeing some increased interest from first home buyers.”

Early autumn auction volumes are tracking about 10 per cent higher than last year, Domain Group data shows.

“We have noticed an upswing in our 2018 auction numbers leading into Easter compared to the same period for 2017,” said senior auctioneer Adrian Bo, McGrath‘s general manager of company-owned sales.

McGrath’s auction numbers for next month are up 21 per cent on last March, Mr Bo said, with the biggest jump in the eastern suburbs and Sutherland Shire, which have seen a 62 per cent increase. 

The Agency’s director of sales and chief auctioneer Thomas McGlynn said all eyes will be on the clearance rate on Saturday.

On this weekend last year the clearance rate was 80 per cent from 940 scheduled auctions, but in recent weeks it has been tracking in the high 60s.

“If this weekend’s clearance rate stays at that same level [as previous weeks] we’ll still see a lot of people happy to go to auction,” he said. “If not, people might question it.

“[Saturday] will be a real litmus test of where buyers’ confidence is.” 

If clearance rates hit 70 per cent it would be an exceptional result, said Damien Cooley,  leading auctioneer of Cooleys Auctions – which will call about 110 auctions on Saturday.

“Realistically, I think anything above 60 per cent will be a good thing, given the volume of properties,” he said. 

“This Saturday is a big test for the market, the number have essentially doubled from last week,” Mr Cooley said. “But this weekend is a little out of the box…I know our numbers will be back to half again next week.”

Mr Cooley said the number of ‘Super Saturdays’ are set to decline as Sydney continues to shift away from its property boom.

“The big Super Saturdays of over 1000 auctions, or 900 auctions will reduce as we move back to a more stable market,” he said. “If you go further back, before the boom, a big Super Saturday was having like 750 auctions.”

He noted that if the clearance rate continued to fall it was likely more buyers would look towards selling via private treaty.