The Sydney home auction market weakened again in Saturday as auction prices begin to track backwards.
Sydney recorded a clearance rate of 79.5 percent at the weekend and although down marginally from last weekend’s 79.7 result was nonetheless again the lowest rate recorded this year.
Sydney has now recorded consecutive clearance rates below 80 percent for the first time this year with the underlying market trend clearly falling.
Current buyer activity levels are moving in the opposite direction from last year at the same time when the market was clearly on the rise.
Sydney’s property market recorded a clearance rate of 79.1 percent over the same weekend last year – just below last Saturdays result.
Falling clearance rates may reflect a typical mid-winter fade, optimistic seller expectations in a perceived boom market, relatively high listings or a market running out of steam as this year’s low interest rate driver of improved affordability starts to moderate.
Auction numbers were down on last weekend’s record July Saturday, with 644 listings compared to 715. Saturday’s auction numbers were nonetheless a record for an August Saturday and reflect the extraordinary surge in winter listings this year.
Next Saturday Sydney will remarkably host over 800 auctions which will present an unprecedented winter test for a wavering market.
The upper north shore recorded the highest regional clearance rate at the weekend with a 90.9 percent result.
Next best was the inner west with 87.3 percent followed by the lower north 87.0 percent, Canterbury Bankstown 82.4 percent, the city and east 81.4 percent, the northern beaches 76.7 percent, the south 75.0 percent, the west 73.5 percent, the north west with another relatively low 64.5 percent this weekend, the south west 63.4 percent and the central coast with a clearance rate on Saturday of 57.1 percent.
Notable sales reported at the weekend included a 6 bedroom home at 75 Albyn Road Strathfield sold for $3,550,000 by Devine Real Estate, a 5 bedroom home at 5 Augusta Street, Concord sold by LJ Hooker Drummoyne/Concord for $3,100,000, a 6 bedroom home at 16 Burgoyne Street, Gordon sold for $3,020,000 by Ray White Gordon/St Ives, a 4 bedroom home at 4 Cevu Avenue, Willoughby sold by Forsyth Real Estate for $2,910,000 and a 5 bedroom home at 12 Selborne Street, Burwood sold for $2,905,000 by Rich+Oliva Croydon Park/Burwood.
The most expensive property reported sold at auction at the weekend was a 4 bedroom unit at 1/46 Drummoyne Avenue Drummoyne sold for $3,570,000 by Ward Partners.
The most affordable property reported sold at the weekend was a 4 bedroom home at 3 Birdwood Drive Blue Haven sold for $360,000 by Raine and Horne Charmhaven.
With auction clearance rates clearly trending down in Sydney over the past month it’s no surprise that prices growth has also weakened.
Sydney’s median home auction price fell by 9.1 percent over July compared to June. The July median of $1,000,000 however remains 16.3 percent higher than that recorded over July 2014.
Record investor activity has been a significant driver of the extraordinary increases in Sydney home prices over the past year
The ABS reports that the value of residential investor loans approved in NSW over the first five months of this year is 26.6 percent higher than that recorded over the same period last year.
Increases in mortgage rates for home investors announced last week by a number of banks are unlikely to have a significant impact on investor activity chasing relatively high yields and strong capital growth.
Rate rises however may be passed on by landlords to tenants through rent increases which spells bad news for those first homes buyers waiting in the queue and already struggling to save for a deposit.
Although banks have increased investor mortgage rates, the Reserve Bank is likely to leave official rates on hold for the third consecutive month when it meets this week.
The economic outlook remains cloudy with the Bank likely to maintain its current wait-and-see attitude on rate settings until a clearer picture emerges