News Coronavirus Auction pain continues as property prices start to fall

Auction pain continues as property prices start to fall

Sydney's most expensive sale was a four-bedroom house in Alexandria. Photo: The Agency
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Vendors cancelled half of the auctions scheduled to take place this week amid fears the property market is headed for a major downturn.

Property analytics firm CoreLogic said the ban on physical auctions and plunging consumer confidence had encouraged vendors to hold off selling their homes – pushing down the preliminary clearance rate across the capital cities to 39.1 per cent.

Only 356 of the 911 results captured by CoreLogic were successful sales – with almost two-thirds (64 per cent) coming before auction.

As with recent results, the preliminary clearance rate is likely to be revised down, as 1848 homes were originally scheduled for auction this week.

The dire weekly results were mirrored in Saturday’s figures.

CoreLogic captured 315 of the 869 homes scheduled in Melbourne.

Only 125 were sold – giving the city a preliminary clearance rate of 39.6 per cent for Saturday, compared with 39.7 per cent for the week.

This five-bedroom home at Glen Waverley was Melbourne’s most expensive sale. Photo: Ray White

The majority were withdrawn from sale (167 homes) or sold before auction (90). As was also the case in Sydney.

Of the 617 Sydney auctions scheduled for Saturday, CoreLogic captured 372 results and fewer than half were successful.

The preliminary clearance rate for the day came in at 39.0 per cent, compared with 39.8 per cent for the week.

And most of the captured results were withdrawn from sale (189 homes) or sold prior to auction (88).

The dire results mark another poor showing for the auction market in a week that saw average house prices report their first week-to-week falls since August.

Although the length and severity of the lockdown is still up for debate, economic forecasters have tipped the coronavirus pandemic to cut house prices by anywhere from 5 per cent to 30 per cent.

The Agency sold this Alexandria home for $2,585,000. Photo: The Agency

The latest predictions come from economists at Commonwealth Bank.

Earlier this week, they said prices in Sydney and Melbourne were likely to fall by 10 per cent or more over the next six months – roughly taking them back to where they started the most recent boom in June – with other capital cities expected to suffer a similar fate.

CBA head of Australian economics Gareth Aird attributed the falls to rising unemployment, falling rents and a lack of foreign investment.

But he noted that the extent of the falls would largely be “determined by the magnitude of the lift in unemployment and the length of time that the government-imposed restrictions on day-to-day activity remain in play”.

Some homes are still selling for a pretty penny, though.

Below are the most expensive confirmed sales this week.

The most expensive sales across the capital cities