Sydney auction market weakened in autumn, but some suburbs are bucking the trend

There were a total of 11,000 Sydney auctions over the three autumn months, with volumes down around 7% on last year's offerings during March, April and May.

Before we move too far into the winter listings slowdown that emerges from the Queens Birthday weekend onwards, it is timely to review just where Sydney stands after the autumn auction selling season.

The city wide clearance rate fell from 75% last Autumn to 61% of homes selling at auction this autumn. And it seems winter has kicked off even weaker.

No region escaped the downturn, but Blacktown emerged the hardest hit when the CoreLogic results are broken down. There was a 36% success rate around the Blacktown region, with CoreLogic pinpointing the actual suburb's 70 offerings ranked as the 20th busiest suburb.

The outer West, Parramatta and South West all saw clearance rates in the low or mid-40s.

With 1500 offerings, Sydney's eastern suburbs emerged the strongest region with 72% selling, but this was down from 80% on Autumn 2017. The busiest region was North Sydney and Hornsby where 69% of the 1700 offerings were sold.

Randwick was the busiest suburb with 81% of its 170 auctions finding buyers, with Mosman second busiest with 83% of the 146 offerings finding buyers.

Northbridge at 90% was the best selling auction hotspot during autumn, though with just 34 auctions.

Bronte, Dover Heights, Mosman and Fairlight made up the best performing five suburbs.

The CoreLogic data indicates the truism that Sydney is not one market, but rather hundreds across the suburbs. 

There is no doubt boom fatigue impacted most markets as Sydney did go through an amazing five year run which saw the median price up 75%.

Buyer enthusiasm certainly sapped towards the end of last year, and this escalated in Autumn. 

The average number of bidders at auction fell from five or more to three or less.

Vendors likewise have begun to drop off too. CoreLogic put fresh offerings as now down 11% on last June.

I still think there is buyer enthusiasm there, but lenders are not prepared to lend to prior levels.

Noting there were buyers waiting in the wings, Tim Lawless, the head of research at CoreLogic, agreed this week that credit restrictions was the key driver of the softness.

Commentator Martin North from Digital Finance Analytics has noted credit is harder to get. His surveys show that up to 40% of applications for mortgages are being turned down, compared with 5% a year ago, as lenders apply more forensic analysis of applications received. 

Just two years ago an online calculator advised borrowers could secure $825,000 on a $100,000 salary.

The same calculator advised $625,000 was the limit.

So buyers need to stay in touch with their lenders and to keep auction bidding at a level that matches their budget and knowledge of the recent local pricing.

This article first appeared in The Daily Telegraph.