Sydney’s real estate agents and auctioneers are calling on vendors to set realistic reserve prices in the lead-up to the biggest auction day so far this spring.
About 1000 homes are expected to go under the hammer this weekend on the first “super” Saturday. But some fear a bloodbath since auction clearance rates have plummeted from near 90 per cent four months ago to 71.3 per cent on Saturday.
“It’s the weakest spring market for three years,” Domain Group senior economist Dr Andrew Wilson said.
“Parts of the city are showing signs of fatigue.”
Auction volumes are up almost 50 per cent this September, with almost 2500 homes going under the hammer so far this month. Auction numbers were also well up over July and August, with 800 auctions most Saturdays – unheard of for winter.
But the high volumes are now taking their toll. The north-west of the city has gone from one of the best-performing regions to one of the weakest. On Saturday, just 54.3 per cent of homes up for auction sold.
Real estate agent Peter Grover of Century 21 Castle Hill says there’s an oversupply of homes coming to the market in his area. “There’s a lot more come on in the last four weeks,” Mr Grover says.
“And a lot of investors are turning away from your traditional 30-year-old dwelling to an off-the-plan purchase – your typical house at $1.2 million is a bit of a stretch for an investor.”
He says banks charging higher interest rates for investors is also starting to discourage many.
“It’s not a catastrophe – if you set a realistic reserve you will probably sell.”
Agents in the Canterbury Bankstown area have also been finding it tough going. The principal of David Kay First National Belmore, Phil Madirazza, admitted to being a bit nervous about his super Saturday auctions.
“We’ve got three auctions ourselves and they’re all going to be touch and go,” Mr Madirazza said.
“Vendor expectations are too high and they’re just not listening to what the [buyer] feedback is.
”I think there will be quite a few pass-ins to be honest.”
He said auctions in his area are tough. “There’s been a noticeable change in the amount of registrations and we have to work the floor a bit harder than before.”
Auctioneer Damien Cooley says he has more than 100 auctions scheduled in Sydney on Saturday.
“There’s no doubt that there’s a little bit of panic coming across the industry, with some vendors and some agents,” Mr Cooley said.
“They don’t want to miss the boat but i don’t see any reason to panic, i think the market will continue to grow albeit at a much more calmer pace.
“I’m expecting a clearance rate similar or perhaps slightly down on the week we’ve just had.”
Given the high numbers, he said many agents were trying to sell their properties before the auction. “They’re thinking perhaps we should wrap it up now rather than risk not getting it across the line.”
He, too, said vendors needed to be realistic. “I’ve had cases of where it’s got to $690,000, and the owner wants to hold out for $700,000.
“It’s 10 grand.
“Let’s be realistic as to where the market’s at, let’s listen to what the buyers are saying.
“It’s easy to say that when an owner has seen a recent sale down the road, and they feel their property is better than that.
“A lot of vendors don’t realise that the market is different from even three months ago.”
Many regions are holding up better than others.
“Higher-priced inner and middle suburban areas continue to report reasonably healthy early spring results,” Dr Wilson said.
The city and east recorded the highest clearance rate at the weekend with a strong 84.1 per cent followed by the northern beaches with 82.9 per cent, the inner west 77.9 per cent, the south 76.9 per cent, the lower north 74.2 per cent, the upper north shore 72.7 per cent and Canterbury Bankstown 70 per cent. The west had a clearance rate of just 50 per cent.