Sydney market still looking good with auctions rising

Sydney’s home auction will be confronted by a surge in listings this weekend that will yet again test the resilience of what has so far been a positive start to the year.

This weekend 549 homes are scheduled to go under the hammer, which is well ahead of the 358 auctioned last weekend but again well below the 636 auctioned over the same weekend last year.

Auction volumes remain subdued so far this year with activity remaining 27 percent lower or 320 fewer auctions than conducted over the same period last year. This trend is likely to continue over coming weeks although higher clearance rates may encourage more sellers into the marketplace.

Sydney’s inner west suburban region will yet again host the highest number of auctions this weekend with 84. This will be closely followed by the city and east with 82, the south 77, the upper north shore 69, the lower north 57, the northern beaches 55, the west and Canterbury Bankstown each with 36, the north west 25, the south west 14 and the central coast with 11.

Higher numbers and a higher proportion of inner suburban higher priced properties will be a feature of the Sydney market’s home auction offerings this weekend.

Manly on the northern beaches will host the most suburban auctions on the weekend in Sydney with 11 followed by Randwick 10, Mosman nine, Earlwood, Paddington and Oatley each with seven, with a number of suburbs with six auctions each including Marrickville, Chatswood and Ryde.

Relatively lower auction numbers may be assisting higher clearance rates with fewer choices for buyers increasing competition for available properties.

The Sydney home auction market recorded another encouraging result last Saturday with early-season indications of a revival in buyer activity now consolidating.

Sydney recorded a clearance rate of 74.3 per cent last weekend which was ahead of the previous weekend’s 72.5 per cent and again the highest result since September last year. Saturday’s rate however remains well below the boom-time, 83.3 per cent recorded over the same weekend last year.

The Sydney auction market has made an unequivocally positive start to the year although stern challenges await – starting this weekend.

Latest ABS home lending data confirms that the local market ended 2015 on an overall positive note providing a solid platform for activity evidenced so far this year.

The appetite for residential investment in Sydney predictably remains resilient with loans for this group in NSW increasing by 5.8 per cent over December to $5.41 billion. This result indicates a consolidation of investor activity following sharp falls as a consequence of higher interest rates directed to this group by the financial regulator last July.

Despite recent falls, NSW still accounts for 42.9 per cent of all residential investor lending in Australia.

Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson

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