Sydney's summer auction surge tests the market

Auction numbers continue to rise in Sydney with an end-of-year rush to market by sellers set to continue to put downward pressure on clearance rates.

Over 900 homes will go under the hammer in Sydney on Saturday which will be higher than last weekend’s 874 auctions and also significantly higher than the 734 auctioned over the same weekend last year. And more than 600 homes will be auctioned on the final Saturday of the season in a fortnight – a record final weekend offering for Sydney.

Sydney’s upper north shore will host the highest number of regional auctions this weekend with 126, followed by the south with 121, the inner west 117, the city and east 113, the west 84, the lower north 73, Canterbury Bankstown 69, the south west 65, the northern beaches 50, the north west 41, the central coast 20 and the Blue Mountains with two auctions listed on Saturday.

Castle Hill is the most popular auction suburb in Sydney this weekend with 11 followed by Epping, Paddington and St Ives each with 10 and a number of suburbs with nine auctions listed including Ashfield, Eastwood, Surry Hills and Condell Park.

The Sydney home auction market commenced summer on a weaker note last weekend as sellers continue to flood the market ahead of the looming end of year holiday shutdown.

Sydney reported a clearance rate of 75.8 per cent last Saturday which was lower than the 78.8 per cent recorded the previous weekend but remained well ahead of 57.5 per cent recorded over the same weekend last year.

Although last Saturdays’ rate was the lowest recorded by the local market for over four months, it was nonetheless still a good result for sellers and reflects the surge in listings over recent weekends.

Results in Sydney’s booming inner suburban, higher-priced regions were noticeably lower last weekend although these areas clearly remain a seller’s market.

Top performer was the Blue Mountains where the single reported auction sold under the hammer followed by the central coast with a clearance rate of 94.7 per cent, the northern beaches still strong at 88.1 per cent, the lower north 82.6 per cent, the inner west 79.3 per cent and the most sales with 69, the city and east 78.9 per cent, the upper north shore 77.5 per cent, the south 73.9 per cent, Canterbury Bankstown 72.7 per cent, the west 63 per cent, the north west 62.1 per cent and the south west with a clearance rate of 54.8 per cent.

The Reserve Bank as expected decided to leave interest rates on hold again at the record low 1.5 per cent at its final meeting of the year this week. The Bank is not scheduled to meet again until next February.

Although rates remained on hold, recent economic data has been mixed at best with growing signs of a further slowdown in economic activity. Unless there is an improvement in the national economy, the likelihood remains of further cuts in official rates next year to stimulate an increasing stagnant performance – and regardless of the nature of prices growth in the Sydney and Melbourne housing markets.

Dr Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson