A recent decline in scheduled auctions points to sellers retreating from auctions in a softening market. Picture Daily Telegraph / Monique Harmer
Sydney’s auction clearance rates have fallen for consecutive recent weeks, with new data pointing to fewer homes going under the hammer while more sellers step back from the softening market.
A preliminary report from REA revealed there were 574 auctions scheduled in Sydney last week, down 13 per cent year-on-year, and 521 auctions scheduled next week, down 16 per cent year-on-year.
This comes amid Sydney last week recorded its eighth successive week of sub-50 per cent clearance rates, with last week clearance rate reported at 39 per cent, up marginally from 38.8 per cent the week prior, according to PropTrack.
Auction clearance rates below 50 per cent have typically correlated with falls in home prices, with Sydney prices already an average of 2.5 per cent below what they were in February.
REA Group economist Luc Redman said there were signs auctions success rates were improving in some areas, but only because sellers were accepting reality.
“Sellers (are) re-evaluating their price expectations and potentially, meeting buyers where they are at,” Mr Redman said.
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Auctioneer Edward Riley and prospective buyers at a home for auction in North Strathfield. Picture: Sarah Wilson
Mr Redman said clearance rates have been on a downward trajectory since the start of the year, primarily driven by interest rate rises, cost of living pressure, and budget tax changes.
“Winter is usually a slower period for the property market and may mean that current clearance rates will remain low/steady over the short-term, until seller expectations change or the market shifts,” he said.
Auctioneer Tom Panos said recent auction clearance results reveal the market is “still struggling and its trying to find a footing”.
Mr Panos said in a video posted to social media that buyers were “in command”, sellers trying to find the best way to sell while auction volumes were falling.
“Fewer homes are coming to the market and even fewer are selling,” he said.
“We’re not seeing a market in freefall, but we’re certainly seeing one that is trying to find a bottom.”
Sellers have still recorded actual wins on the auction floor, with a few results across the city on Saturday seeing homes sell above reserve prices.
In the Inner West, 20 Hopetoun St, Camperdown had a reserve of $1.44m, selling for $1.465m.
The two registered and active bidders competed with an opening bid of $1.255m.
Initially bidding increased in $25,000 increments and then dropped to $5,000 and $1,000 bids.
Auctioneer Stu Benson at 31 Copper Street, The Ponds
Auctioneer Edward Riley said the key to the campaign was the vendor’s willingness to adjust their expectations to align with current market conditions.
“When vendors are realistic and agents actively manage expectations throughout the campaign, buyers gain the confidence to compete,” he said.
“Astute purchasers recognise that periods of weaker sentiment often present some of the best long-term buying opportunities, and suburbs like Camperdown remain highly sought after because of their lifestyle, connectivity and enduring appeal.”
Another home at 31 Copper St, The Ponds sold for $332,000 above its $2.4m reserve.
With 11 bidders, 58 bids, and around 200 in attendance, the home sold for $2.732m.
“Our main buyers all wanted a home that they would call their own for the next 10 or so years, and for those playing the long game, it’s never the wrong time to buy,” Auctioneer Stu Benson of Benson Auctions said.
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