Sydney home auction market on the slide

The Sydney weekend home auction market continues to track backwards, with low listings and a consolidating trend of falling clearance rates.

The relatively subdued school-holiday market will be influenced on Saturday by further low listings as a consequence of the distractions of the Anzac Day holiday long weekend.

A total 430 auctions is scheduled, higher than the 360 listed last weekend and well ahead of the 50 auctioned during the sale weekend last year. Auction numbers so far this year, however, remain well down on the totals reported for the same period last year.

Sydney’s south will again host the most auctions this weekend with 63, followed by the city and east and the inner west each with 62, the upper north shore 46, the northern beaches 36, the south-west and the west each with 32, the lower north 27, Canterbury-Bankstown and the north-west each with 20 and the central coast with 10 auctions scheduled. 

The most popular suburbs in Sydney for auctions at the weekend are Hornsby, Ryde, Blacktown and Kensington, each with six, followed by Strathfield, Surry Hills, Randwick, Rozelle and Earlwood, each with five, and several suburbs with four auctions scheduled, including Epping, Balmain and Ashfield.

The Sydney weekend home auction market reported its lowest clearance rate of the year last Saturday and the third consecutive weekend of falling rates.

Sydney’s clearance rate of 67.7 per cent was again below the 70.3 per cent recorded the previous weekend and well below the 88.2 per cent recorded for the same weekend last year.

Sydney clearance rates have averaged 70.6 per cent since Easter, compared with the 75.1 per cent recorded before the break.

Saturday’s lower result may reflect the impact of the school holiday, with lower numbers of listings particularly from the inner suburban regions, which have been strong so far this year

Sydney house prices also continue to fall, with the March-quarter result reporting a 1.5 per cent fall to a median now below $1 million at $995,804. Despite falling for the past two quarters, house prices have increased 6.9 per cent during the past year, but the annual rate of growth is now well below Melbourne’s 11.8 per cent.

Melbourne and Hobart were the only capitals to record growth in house prices during the March quarter.

Sydney unit prices also decreased in the March quarter, falling 1.7 per cent to a median of $656,166 for an annual increase of 5.8 per cent.

Auction activity will increase in the coming weekends as the holiday concludes, although clearance rates and volumes will remain well below last year’s results.

Low income growth, tighter lending conditions from banks particularly for investors, and flat interest-rate settings will continue to constrain price growth through 2016. 

Uncertainty over the political outlook with a looming federal election and the prospect of significant policy changes will also act to constrain consumer and investor sentiment in the near term.

Dr Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson

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