Sydney auctions: August clearance rates show differing fortunes across the city

Less than half the number of properties listed for auction in Sydney managed to sell under the hammer in August, but some areas are managing to buck the trend of a weakening property market.

While the average clearance rate in Sydney was 48.2 per cent in August, the northern beaches proved to be the most resilient region with a rate of  63.1 per cent.

The city, the east and the lower north shore markets also bucked the trends with their clearance rates of 61.6 per cent and 61.1 per cent, respectively.

The Agency auctioneer Thomas McGlynn said premium locations and properties continued to raise the interest of buyers, even in a downturn.

“The buyers that have dropped out of the other markets haven’t dropped out in the northern beaches,” Mr McGlynn said.

“The northern beaches still provides enormous value for the style of properties available.

“The houses you’ve got is on larger blocks of land, the apartments are larger and they offer an amazing lifestyle.”

Cooleys auctioneer Damien Cooley agreed that the demand for properties and their value in these top three markets held up better in cooling conditions.

“If we looked at the average household incomes in those area compared to other areas – the demographic of buyer and seller in these premium locations are less susceptible to the downturn than other areas,” Mr Cooley said.

But the number of properties selling under the hammer has fallen since this time last year. Clearance rates have declined between seven and 13 per cent in that time, and one in five properties were withdrawn before auction in the city, the east and the northern beaches. The number was slightly less on the lower north shore.

This showed, Mr Cooley said, that there were pockets of weakness within these markets, too.

“It’s not a positive and the reasons are twofold; [withdrawn properties] lack of buyer interest and the second point is the vendor is unrealistic in their expectation and is not listening to buyer feedback,” Mr Cooley said.

Selling agent Stevan Bubalo, of Novak, sold a two-bedroom villa in Dee Why, one of the few in the area that neither passed in nor was withdrawn over the weekend.

“If you’re competing with 80 other similar dwellings, you need to be priced smartly [to sell on auction day],” Mr Bubalo said.

At the other end of the scale, the Central Coast registered the lowest clearance rate for the month, at 27.1 per cent.

Matthew Farrugia, of LJ Hooker Terrigal, had no trouble selling a three-bedroom property at 46 Willoughby Road.

There was no shortage of interest or competition – 130 buyers inspected the house and 14 bidders registered on auction day, all of them active, too.

Mr Farrugia put the successful sale down to running an extended campaign of five weeks and reappraising the property weekly to ensure the vendor’s final reserve of $750,000 was in line with buyer feedback.

“We needed to make sure it was set to sell on auction day. It was a longer campaign than most because we were aware of the fact that is takes longer to get finance approved and we’re hearing a lot of buyers saying they’re not rushed either,” he said.

“It was about giving buyers some space and time to get organised and making sure we’re meeting the market pretty quick.”

Mr McGlynn believed the clearance rate was not an indication of buyer activity, but whether sellers were prepared to meet the market on auction day.

He said many vendors had found it difficult to realign expectations and the rate of properties transacting after auction had increased since 12 months ago once vendors agreed what their property was worth in today’s market.

Domain’s data scientist Dr Nicola Powell noted the Central Coast was not a traditionally auction centric market

“Its clearance rates were not particularly strong even in the boom times when Sydney was achieving the clearance rates of 80 per cent,” Dr Powell said.

She said the region was still performing better than other comparative regions when it came to price growth in the lower priced points of the market.