Westpac rate rise spooks Sydney buyers as auction success rate slips to mid-60s

Westpac rate rise spooks Sydney buyers as auction success rate slips to mid-60s
Westpac rate rise spooks Sydney buyers as auction success rate slips to mid-60s

Sydney's moderating auction market lost more ground yesterday, with buyers spooked by higher interest rates and price fall predictions.

A weakened 65% clearance rate ended a turbulent weak where Westpac raised home loan rates and several economist forecast the Sydney faced price declines from early next year.

There were around 820 auctions across Sydney, according to CoreLogic RP Data, with recent results having held steady at around 70%. 

Yesterday's 65% clearance rate, the lowest since the 86% May peak, was down 11% on the same time last year, according to Australian Property Monitors. 

More bumper super Saturdays stock is scheduled over the next two weekends.

"There were lots of examples of buyers dropping off properties in the days before auction," auctioneer Damien Cooley noted.

"There is more choice now," he said, adding Cooley Auctions own clearance rate was 63%, down from 77% the prior weekend.

"The market is still good," he said.

There were also plenty of pre-sales with nervous agents recommending vendors take the best offers ahead of auction.

Melbourne results remained bouyant, according to the REIV, with a clearance rate of 74 per cent recorded this weekend compared to 72 per cent last weekend and 72 per cent this weekend last year.

There were 1080 auctions reported to the REIV. 

Across Sydney, 1,074 homes were taken to auction over the week with a preliminary clearance rate of 66.6 per cent across 830 reported results, according to CoreLogic RP Data, which ranked it as the lowest clearance rate for the year and also the third week in a row where Sydney’s clearance rate has been below 70 per cent.

"The last time the clearance rate was this low was the first week of December 2014 (66.1)," CoreLogic RP Data said.

Last October 929 Sydney homes were taken to auction and the clearance rate was 72 per cent.

"This week, the performance across Sydney’s individual sub regions was varied," CoreLogic RP Data said.

Across the Outer South West region, where 21 results have been reported so far, the preliminary clearance rate was 47.6 per cent, while across the Inner West (80 per cent) and the Eastern Suburbs (76.8 per cent), the success rate of reported auctions was much higher.

McGrath Estate Agents results saw 33 % of its listings sold before auction, with an overall 65% clearance rate. 

McGrath secured the highest sale at $4.25 million in Longueville for a home listed with $3.4 million plus hopes.

The cheapest was $357,000 at Kurrajong Heights.

Mosman was the busiest suburb for auctions followed by Ashfield, Baulkham Hills, Marrickville and Liverpool.

Shane Oliver, chief economist at AMP Capital, suggested  it a “watershed week” for property.

A terse Reserve Bank statement ended the week saying home loan lending standards had been poorer than it thought.

The RBA also noted there have been "tentative" signs of some slowing in the Sydney housing markets.

CoreLogic RP Data analyst Cameron Kusher noted the cumulative effect of tighter lending conditions, more expensive mortgage rates for investors and lower yields, as well as natural affordability constraints and higher levels of new housing supply, was dampening "some of the exuberance."  

 

 

 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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Auctions Sydney

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