Sydney's private treaty strength evident in low discounting and shorter days on market: APM

Sydney's private treaty strength evident in low discounting and shorter days on market: APM
Jonathan ChancellorDecember 7, 2020

It is not just the Sydney auction market that quickly regained its 2013 spring momentum after the December break, but private treaty sales too remain strong, according to the latest March figures from Australian Property Monitors.

Both days on market for private treaty sales and the required vendor discount to secure a sale reflect it's very much a sellers' market.

Well for almost everyone, other than Lleyton Hewitt at Palm Beach and Wayne Gardner at Manly.

 

Sydney’s preliminary auction clearance rate for Saturday April 5 was still at around 80 per cent for the 10th consecutive weekend as vendors take advantage of the best autumn sales environment on record.

The median weekend house price was $1.1 million and the median unit price was $700,000.

Ofcourse that's much higher than the typical $765,000 median for houses and the $540,000 median for typical units.

The most expensive property reported sold at auction at the weekend was a five bedroom house at 10 McDougall Street, Kensington sold for $3,775,000 by BHR Group, setting a suburb record.

Not a week goes by without a record with this one well heralded as the vendors Macquarie Bank divisional director Duncan McDonald and his wife Fiona had been expecting more than $3.5 million in the inner eastern suburb with a previous high of $3.2 million dating from 2010 on Baker Street.

The house, with 294 square metre floor space at 10 McDougall Street, sold through Damien Bickmore-Hutt of BHR Estate Agents after an opening bid of $3.6 million.

The string of recent records across Sydney saw another record in the southern Sydney suburb of Bexley with a $2.15 million sale at 5 Wallace Street bettering the previous record of $2,025,000 set in December last year at 37 Wallace Street.

The weekend's cheapest was 331/95 Station Road, Auburn at $156,000 selling to an investor through Ray Fayad at Laing & Simmons Auburn.

Yes the $156,000 top sale was just over double what it last sold for - but that was $71,500 way back in 1994.
 
So rather than this double every 7 or 10 years, here's a case where its 20 years to double.
 
Last rented out at around $240 a week, it reflected a healthy eight percent yield. Though the asking rent was at $230 a week some four years ago.
 
The agent Ray Fayad was saying $155,000 plus in the pre-auction price estimate, so he was spot on. Just the three registered bidders, in part because its 26 square metre size doesn't really fit the bank lending requirements.

There were some 900 properties across Sydney for auction with APM reporting a clearance rate of 80.6 percent.

"This result kept this year’s unbroken sequence of 80 percent plus weekend auction clearance rates intact, now stretching back 10 weeks to Saturday February 1," Dr Wilson the APM senior economist said.

However the revised figures are now tracking at around 75% which is still a strong result, but as I suggested several weeks ago there was a slight market weakening. Perhaps not in terms of volume, buyer numbers, but in the price heights being achieved.

Even the bullish Dr Wilson yesterday detected "early signs are emerging of a slight weakening of auction market activity" with the auction clearance rate trend over the past 6 weeks falling gradually.

He rightly adds that a moderation in auction activity was no real surprise given record numbers of auction listings being offered to the market over recent weeks.

This weekend is set to smash the all-time record for auctions with around 1080 expected to be conducted on a Saturday in Sydney, being the first time Sydney and Melbourne both have 1000 plus auctions. 

The last Sydney record auction bonanza was the 970 offering on 14 December in the lead up to Christmas 2013.

So it will the busiest Sydney Saturday on record, with official records being compiled since Australian Property Monitors started keeping the data in the late 1980s when Sydney was only just beginning to take a shine to onsite auction with the lead from the trend setter Andrew Gibbons agency.

As the APM charts above shows it's not just auction activity, but the normally slower private treaty is turning over nicely nationally across the capital cities especially. 

Of course something might always emerge from left field.

Rod Cornish, a division director of Macquarie Capital and a long-time follower of property cycles, told the AFR's Robert Harley recently that "until we see rates rise to a tipping point level, we don’t see a downturn in prices.”

“We will get that, but I don’t think that is a 2014 story. We will not see the tipping point till 2015 or 2016,” Cornish estimates.

That's can't be what the RBA Governor Glenn Stevens wants to hear.

His recent comments were spot on when he took the opportunity to warn about the potential excesses in housing.

Pointing expressly to the recent experience of south east Queensland housing prices and activity Stevens noted “that the cycle can be so drawn out is a salient lesson, including for those outside Queensland. Even if a full-blown crisis does not eventuate, as was true of Australia, overdoing it on housing on the way up is usually followed by a fairly extended period of working off the problems.”

Let's hope the buyers quickly work off their aggression so we avoid a full blown crisis.

 

 

 

 

 

 

 

 

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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