Auction market still yet to get into gear over 2019 as sellers wait out price falls
Instead of the echo of the auction hammer it is silence that reigns across Sydney’s suburbs with few than half the number of homes up for sale than just two years ago.
Today just 473 homes are scheduled for auction, nearly 250 fewer than over the same weekend last year and about 500 fewer than in 2017.
And the lower volume follows a slower February, with CoreLogic figures showing nearly 1000 fewer homes under the hammer compared to the long-term average for the month.
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The suburbs bucking the housing slump
The drop in activity was most severe in regions more than 15km west of the CBD, where many suburbs that had hosted up to 20 auctions each week a few years ago will this week host fewer than five.
Just three auctions are scheduled for northern beaches hub Manly, two for Parramatta, Newtown and Ryde, and just one apiece for Liverpool, Penrith and Fairfield. And Mosman, Sydney’s busiest selling suburb over 2018, will host just two auctions today.
Data from auction house Cooley Auctions showed a nearly 40 per cent annual drop in auctions over February, with the average price for sales dropping from $1.3 million to $1.07 million.
Auctioneer Damien Cooley (pictured) said many would-be vendors were spooked by the dismal auction clearance rates reported during the Christmas period, when just 40 per cent of auctions were successful.
“Homeowners aren’t planning to sell unless they really need to,” he said. “There is no sense of opportunism.”
The volume of “fresh” listings could be even lower than the official numbers suggested, because many of the current round of homes going to auction were “regurgitated stock”, Mr Cooley said.
“The owners weren’t able to sell at auction a few months ago so they’re trying again,” he said.
A similar trend has hit the private treaty market, according to SQM Research director Louis Christopher.
He explained that total private treaty listing numbers recently rose to nearly 36,000, but many of the homeowners trying to sell were those who had first listed back in spring.
“They’re relisting,” Mr Christopher said. “It was a tough spring selling season and there were a lot of (homeowners) who didn’t sell.”
The recent drop in auction volumes would give sellers of “quality” homes a boost, Mr Cooley said.
“There is not a lot of A-grade stock on the market, the kind of homes that are in a prime position and well-located,” he said.
“Sellers of these sorts of properties will get a good result because they have what buyers are looking for … this kind of auction will create an urgency with buyers that helps sales.”
CoreLogic auction analyst Kevin Brogan said diminishing auction volumes would drive a gradual lift in Sydney’s auction clearance rate.
Last week, 54 per cent of the properties that went to auction sold successfully under the hammer, compared to 50.2 per cent the week prior and 49 per cent over the first week of February.