Australia Property

[greengiraffe]

• Sep 27 2015 at 11:50 AM 
   
  
  
•  Updated Sep 27 2015 at 6:25 PM 
  

'Sydney's great auction boom has clearly ended'

• Share via Email

NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/v/q/s/c/image.related.afrArticleLead.620x350.gjvqr2.png/1443342331619.jpg[/img]This three-bedroom apartment at East Esplanade, Manly sold for $1.355 million on Saturday after being passed in at auction. Christopher Pearce
[Image: 1426319989079.png]

• Share on twitter

by Larry Schlesinger
Auction clearance rates rose in Sydney and held firm in Melbourne after one of the biggest auction weekends of the year, but did nothing to dampen expectations that boom conditions have ended and that price growth will continue to moderate over the coming months.
In Sydney, a preliminary clearance rate of 74.2 per cent was recorded by CoreLogic RP Data, with 1000 of the nearly 1200 scheduled auction results in. This was up on last week's calendar year-low of 70.7 per cent, but down on the 76.9 per cent achieved over the same weekend last year.
"Sydney's great auction boom has clearly ended. It is evolving into a buyer's market," said economist  Andrew Wilson from Domain Group.
SQM Research director Louis Christopher said once all the results were in, the Sydney clearance rate was likely to be closer to 70 per cent, well down on results of more than 75 per cent achieved last spring and far off the 80 to 90 per cent clearance rates reported earlier in the year. 

"The market has slowed down in Sydney. Buyers are still there, but they are a little more cautious and there are more sellers," he said. He added that there was also more disagreement between buyers and sellers about what represents fair market value.
But, he said, these conditions reflected a return to more normal market conditions, not an impending bloodbath as some analysts have predicted.
SLOWDOWN, BUT NOT DRAMATIC
"We will see a slowdown in price growth in Sydney and Melbourne, but not as dramatic as some are saying. The market is still rising, but at 7 to 9 per cent annually, instead of 15 to 20 per cent," Mr Christopher said.


He said clearance would have to fall below 60 per cent before there would be any rapid slowdown in the market.
The weaker buying conditions were also reflected in the more subdued launch on Saturday of One A Erskineville, a 172-unit project developed by the Linear Group and ASX-listed Abacus Property, just three kilometres from the Sydney CBD.
Priced from $625,000 upwards, less than half the available stock sold on the day [80 units] compared with same-day apartment sellouts earlier in the year.
Off-the-plan buyers included Emily Whittington, who paid $885,000 for a two-bedroom unit. "The market is crazy. Astronomical prices. I am trying to save and the prices keep going up. I just want to get on the ladder and get a unit here, as I don't like auctions," she said.

MELBOURNE CLEARANCE RATE FALLS SLIGHTLY
In Melbourne, where there were also nearly 1200 auctions scheduled, the clearance rate fell slightly from 73.7 to 73.4 per cent, making it the fourth-weakest result of the year. (Last year, the same weekend hosted the AFL Grand FInal with just 112 auctions recorded.)
Melbourne buyer's agent Richard Wakelin said a rebalancing of the market was under way, with a "definite reduction in investor activity" and more properties being either passed in, sold prior to auction or sold off-market.
"I think Melbourne clearance rates will continue to fall to between 65 and 70 per cent. There's nothing wrong with that. It's restoring Melbourne to a more healthy and balanced market," he said.

"In terms of price growth, there will be little or no price growth for the rest of the year, particularly in the second-hand unit sector," Mr Wakelin said.
But, he said, there was still strong demand for single-fronted period-style cottages under $1 million, which still pull big prices.
SYDNEY HARBOUR VIEWS STILL ABOVE RESERVE
In Sydney, buyers were willing to pay well above the reserve, for properties with harbour views. This was evidenced by the weekend's top auction result, the $7.75 million sale of a Darling Point duplex at 76 New Beach Road, which sold through Ettiene West of Morton Circular Quay with Damien Cooley the auctioneer. The buyer intends to knock it down and build a new home.
On the other side of the harbour, right at the tip of Cremorne Point, a Newtown couple paid $1.52 million, more than $300,000 above the reserve, for a two-bedroom 1920s apartment on Wulworra Avenue with panoramic views of the Sydney Opera House, Circular Quay and the Harbour Bridge.  It sold through Belle Property Neutral Bay's Matthew Smythe, who attributed the strong result to the rarity of the location. 
Nationally, the clearance rate rose to 71.3 per cent, up from 69.9 per cent last week, according to CoreLogic RP Data. 
In the smaller auction markets, Brisbane's preliminary clearance rate rose to 58.9 per cent up from 48.9 per cent at the same time last year as auction numbers rose to 199.
Adelaide hosted 127 auctions with a preliminary clearance rate of 68.8 per cent recorded, compared with 65.6 per cent last year.
Perth's clearance rate was 36 per cent from 25 auctions, Canberra managed a 50 per cent clearance rate from 36 reported auctions, while in Tasmania just three out of 18 properties sold under the hammer, based on reported results.