Sydney set to bounce back from year's weakest auction weekend

It was inevitable that Sydney’s bullish auction market would hit a roadblock at some point.

On Saturday the city recorded its lowest auction clearance rate of the year so far, at 73.6 per cent. 

In what could be an early sign of a weakening in the recent strong buyer activity, this is the second uncharacteristically low result in three weeks, following the previous low of 75.6 per cent recorded on April 22nd.

Saturday’s result was significantly lower than the 80.3 per cent recorded the previous weekend but still remained ahead of the 71.6 per cent recorded over the same weekend last year.

Lower volumes of listings impacted on the clearance rate, with just 458 homes listed to go under the hammer at the weekend. This was well down on the previous weekend’s 651 listings and also lower than the 526 auctioned over the same weekend last year. However, the market will bounce back hard next weekend with more than 750 auctions scheduled.

During the first four months of this year 9853 Sydney homes were reported listed for auction, which was an increase of 28 per cent compared to the 7697 listed over the same period last year.

In recent months governments and policymakers have directed significant attention to solving perceived housing market imbalances. The clear risk however is that ad hoc, one-size-fits-all policies may create or exacerbate stress in local markets and market segments.

Monetary policy continues its weighty focus on supposed generalised housing market stress with the Reserve Bank leaving rates on hold again this month in hopeful anticipation of an economic revival sooner rather than later.

This week it will be the turn of fiscal policy to address the much promoted woes of the housing market through the federal budget.

The Sydney home auction market was steady during April, despite the distractions of holidays, recording an overall solid clearance rate of 74.4 per cent. This was the same as recorded during the previous month but significantly higher than the 66.9 per cent recorded over April last year.

The Sydney median auction price was also steady in April despite a lower proportion of higher-priced suburbs listed over the holiday month. The median remained at the March result of $1,301,000 but was well ahead of the $1,190,000 median auction price recorded over April last year.

Sydney recorded a median auction price of $1,170,000 on Saturday which was lower than the $1,230,000 reported the previous weekend and also 7.2 per cent lower than the $1,260,500 recorded over the same weekend last year. A total of $276.8 million was reported sold at auction in Sydney at the weekend.

Regional results were down across the board at the weekend with only three regions reporting results above 80 per cent – and only just above. A very low result from Sydney’s west was a clear contributor to this weekend’s overall lower clearance rate.

The top performer was the Blue Mountains with a 100 per cent clearance rate from the single reported auction. Next highest was the city and east with 83.9 per cent followed by the inner-west 81.0 per cent, the lower north 80.0 per cent, the northern beaches 79.3 per cent, the upper north shore 76.5 per cent.

Only slightly behind was the south with an auction clearance rate of 76.1 per cent, followed by Canterbury Bankstown at 71.4 per cent, the north-west 70.6 per cent, the south-west 70.0 per cent, the central coast 66.7 per cent and the west with a clearance rate of just 41.9 per cent.

Notable sales reported at the weekend included:

• A five-bedroom home at 19 Badminton Road, Croydon sold by LJ Hooker Burwood for  $3,220,000,
• A four-bedroom home at 27 Ravenna Street, Strathfield sold for  $3,150,000 by Devine Real Estate,
• A four-bedroom home at 3 Lawson Street, Bondi Junction sold by Belle Property Bondi for  $2,850,000,
• A four- bedroom home at 49 Station Street, Newtown sold for  $2,810,000 by Urbane Inner West and
• A five-bedroom home at 4 Wyong Street, Oatley sold by McGrath St George for  $2,760,000.

The most expensive house reported sold at auction was a three-bedroom home at 66 Watkin Street, Newtown sold for $3,800,000 by Ray White Surry Hills Alexandria. The most affordable property reported sold at the weekend was a three-bedroom home at 26 Brabyn Street, Windsor sold for $502,000 by Ray White Windsor.