Quality houses and apartments in inner-Sydney and fashionably located properties with redevelopment potential sold for bullish prices at weekend auctions across NSW.
But the city’s residential real estate market is continuing to yo-yo about, with lacklustre auction sales in the mid and outer western suburbs which is dragging down the overall market performance.
On Saturday, the market recorded its lowest result since December 2015, with the Domain Group posting an auction clearance rate of 67 per cent from 490 reported auctions.
The result was significantly down on the 73.2 per cent clearance rate recorded on the previous weekend and 18 percentage points lower than the boom-time 85.1 per cent reported on the same weekend last year.
Even so, some rare and well-located properties achieved outstanding sales prices.
On Saturday, would-be buyers were relaxed about letting many houses and apartments pass in on a vendor bid, as real estate agents warned that spring-time sellers lobbing unreasonably high reserves were being left out in the cold.
One tell-tale sign of a market that is experiencing a change in conditions is when prospective buyers have an opportunity to purchase, they are keeping their cards close to their chest and opt to play a long game, waiting for a property to pass in at auction and then negotiating its purchase. Buyers think they can strike a more favourable deal.
This happened in spades around the city on Saturday.
In addition to the 490 auction results reported by agents, 65 properties slated to go under the hammer at the weekend were withdrawn. The results of a further 208 scheduled auctions were not reported by agents. Many of these will be properties that were passed in on a vendor bid, suggesting that the market could be in a more sluggish state than that indicated by the official weekend clearance rate of 67 per cent.
But prospective buyers need to take stock of the deep-seated regional variations in the market.
Domain Group chief economist Andrew Wilson said the sharply lower clearance rate at the weekend was heavily influenced by a significant decline in buyer activity in Sydney’s outer western regions that each recorded rates well below 50 per cent. By contrast, he said, Sydney’s inner suburbs continued to produce robust results for most spring sellers with the inner-west bouncing back on Saturday after recent low results in that region.
The inner-west was in top gear at the weekend and reported a strong 79.5 per cent clearance rate. It was followed by the lower north at 76.9 per cent, the northern beaches and the city and east each with 74.4 per cent, the south at 70.6 per cent, Canterbury Bankstown at 70.5 per cent and the upper north shore at 66.3 per cent.
Sales were in free-fall in most further-out regions. The north west notched up an auction clearance rate of 46.2 per cent, the central coast was at 42.9 per cent, the south west at 40 per cent and the west could only manage to produce a clearance rate of 39.1 per cent from 46 reported auctions.
Real Estate Institute of NSW president John Cunningham said some markets in the western suburbs had never previously experienced a boom but saw prices soar between 2012 and 2016.
“There are some areas in the west that showed a 100 per cent increase over a six-year period,” he said. “Are they going to potentially suffer in terms of values? I would say: without a doubt. It wouldn’t surprise me in the next quarter if we see some of those areas drop median prices by 5 per cent.”
Number Listed Auctions: 763
Number Reported Auctions: 490
% Cleared: 67 %
Total Sales: $386,840,652