Finance Property Sydney property market headed for ominous ‘30’ figure

Sydney property market headed for ominous ‘30’ figure

This Newport beach house was one of the few Sydney homes selling. Photo: LJ Hooker
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The traditional December auction slump seems worse than ever this year, with preliminary results showing a combined capital city clearance rate of just 43.1 per cent – the 10th consecutive week where less than half of homes taken to auction have sold.

Sydney’s weekend clearance rate sat at 41.4 per cent, Domain reported, with unreported results likely to see it fall into the 30s.

In Melbourne, 766 homes were listed for auction – down from 788 the previous week – with only 45.6 per cent sold.

SQM’s Louis Christopher recently noted the data showed there had only been three prior times since the 1980s when Sydney auction clearance rates had sunk into the 30s.

“That was in October/November 2008 during the GFC, May 2004 after the NSW vendor stamp duty was introduced, and July 1989 when the cash rate hit 17 per cent,” Property Observer reported.

Melbourne did fall into the 30s in the last weekend of spring, and was at 45 per cent based on preliminary results on the first weekend of summer.

And it’s not just the the seasonal distractions of Christmas, the cricket and heading off to the coast. Many buyers have taken a look at the 2018 stock that’s on market and instead decided to postpone purchasing until next year when prices are likely to be cheaper.

Days on market – a good test of the property market – showed that in Sydney, the median days on market a year ago was 31 days but has now ballooned out to to 50 days. That is much higher than the recent low of 24 days in April 2017.

In Melbourne, the median time on market is currently 38 days, much higher than the 23 days a year ago and the highest it has been since March 2016.

As clearance rates have fallen through spring, sale prices have also dropped back as the remaining buyers become Scrooge-like bargain hunters.

The weekend turnover in Sydney totalled just $129 million in sales, well down on the near $600 million this time last year, Domain reported.

Melbourne had $258 million in recorded weekend sales, compared to $826 million the same weekend last year.

There were definitely far fewer buyers around than in spring, with many no bid auctions, agents say.

Australia’s top result was in coastal Sydney, just above the beach at Newport.

The 15 Karloo Parade offering sold pre-auction for $5.5 million through LJ Hooker agents Lachlan Elder and Josephine Cowling.

It fetched less than its price guidance as there had been $5.8 million hopes for the Timothy Moon-designed house at Bungan Beach on the northern beaches.

This Bungan Beach property fell short of the $5.8 million hoped-for selling price, a sign of Sydney’s weakening market. Photo: LJ Hooker
The agents described it as “pure magic” because of the seafront views. Photo: LJ Hooker
The home’s open-plan design maximise the views and sunlight. Photo: LJ Hooker
Imagine waking up to that each morning. Photo: LJ Hooker
And all of the modern conveniences, of course. Photo: LJ Hooker

The busiest suburbs for weekend auctions were all in Victoria, with Glen Waverley topping the list with 25 offerings, according to CoreLogic.

Of the 17 advised Glen Waverley auction results the priciest offering failed to sell, with the townhouse-approved 697 High Street Road holding passed in on a $1.5 million vendor bid.

Melbourne’s cheapest sale was $305,000 for a one-bedroom apartment at Box Hill.

The sale of 406/1 Watts Street, Box Hill was well below the $320,000 to $352,000 price guidance.

The recent $370-a-week rental also sold well below its 2011 $390,000 sale price, CoreLogic advised.

Melbourne’s top sale was 11 Wheatland Road, Malvern at $4.01 million.

The sale of the four-bedroom, newly renovated Federation home sat within the $3.8 million to $4.1 million price guidance through Iain Carmichael at Jellis Craig.

CoreLogic recently calculated the national clearance rate dipping to 41.9 per cent, the lowest result for six years.

Some 2742 homes were taken to auction across the combined capital cities over the past week, slightly higher than the 2701 auctions held in the prior week.

Volumes remain lower than over the same period last year when the final national clearance rate was recorded at 60.3 per cent across 3291 auctions.

Brisbane was the weekend’s weakest east coast capital with a 40 per cent clearance rate, according to CoreLogic.

The former Test off-spinner turned stock market trader Nathan Hauritz and wife Dianne had hoped to secure a weekend auction buyer of their Brisbane home.

But now it is listed with $925,000-plus hopes.

They paid $680,000 for the Bulimba home in 2013.

The 1950s three-bedroom, one-bathroom home featuring traditional period features including polished timber floors and high ceilings, had been scheduled for auction through Ray White Bulimba agent Alex Donnan.

Another post-war Brisbane home fared better.

In Wooloowin, 53 View Street attracted 11 registered bidders, four of whom bid during the auction, Domain reported.

The house, which sold for $875,000 to a developer, had been owned by one family since 1949.

The ANZ-backed REALas price tipping website struggled to anticipate the buyer demand with their forecast $742,000 advisory.

Jonathan Chancellor is editor at large at Property Observer