Sydney auction clearance rates weakening, with Melbourne tipped to join the easing

Sydney’s auction clearance has softened, now sitting at below 80% for the fourth consecutive weekend.

The decline followed 10 consecutive weekends with initial clearance rates above 80% in the early part of 2014.

The revised clearance rate, compiled after more results are added, now sits in the lows 70s.

There is little doubt the market has stepped down a gear over the past month, economist Dr Andrew Wilson at Australian Property Monitors acknowledges.

Ditto price growth, as after 11 months of solid growth, Sydney house prices have slowed, according to RP Data Rismark.

Though the 0.5% average rise in April pushed the median price for Sydney houses above $800,000 for the first time to sit at $802,000.

RP Data senior analyst Cameron Kusher said the slowing of price growth was to be expected as consistent increases were unsustainable.

Sydney prices were up 16.7% annually, compared with the combined capital growth rate of 11.5%. 

“The last time Sydney strung together 11 consecutive month-end increases was in November 2007 when the market added 14.7% and before that in November 2002 when it delivered 19.6% growth,” Rismark chief executive Ben Skillbeck advised.

After the Easter and ANZAC Day long weekend holidays, there were around 630 properties that were put to weekend auction across Sydney.

There was a 77.3% initial clearance rate on Saturday, with the weekend prior's rate revised down to 72.3%. That followed the previous 73.7% revised figure.

APM had the lower north reporting the highest regional initial clearance rate at the weekend at 89.5%.

Next best was the northern beaches with 88.9% followed by the south with 87.2%, Canterbury Bankstown 84%, the city and east at 80.6% and the inner west at 80.3%.  

The most expensive property reported sold at auction at the weekend was a six bedroom 1974-built house at 11 South Street Strathfield (pictured above) sold for $3,850,000 through the McGrath agency. It was given a cautious pre-auction price guidance of $2.55 million to $2.95 million by an out of area agency.

The most affordable property reported sold was an unrenovayed three bedroom house on a 556 square metre block at 65 Luxford Road Whalan sold pre-auction for $255,000 by Starr Partners Blacktown.

Meanwhile Melbourne recorded it highest clearance rate for two months at the weekend when 760 properties went under the hammer in the Melbourne metro area.

APM had Melbourne recording a clearance rate of 73.4% at the weekend.

The outer east had a clearance rate of 82.4%. The next best region was the north with 79.6% followed by the inner south with 77.4%, the inner east at 75.9% and the inner city with a weekend clearance rate of 71.9%.

Melbourne dearest weekend sale was at Brighton at $3.22 million for 11a Wolseley Grove through RT Edgar.

The cheapest sale was a one bedroom through Sweeney Footscray when 10/21 Hampton Parade, West Footscray sold for $185,000. It last sold in 1990 for $56,000. Its price guidance was $180,000 to $198,000.

Greville Pabst from the Melbourne-based WBP Property Advisory expects clearance rates to ease slightly in the coming weeks and be in the range of 67% to 70% as auction volumes start increasing again.

RP Data's combined capital cities preliminary auction clearance rate was recorded at 66.3 per cent this week, having increased from the 64.6 per cent over the previous week.  This is the first time so far this year where the current clearance rate has underperformed when compared to the same time one year ago.

RP Data’s national research director Tim Lawless has noted there is an underlying concern among consumers about the sustainability of dwelling value growth.

He said he number of respondents who believe the housing market is vulnerable to a significant correction has now grown to 66 per cent.