Thursday, 1 November 2018

Sydney's Real Estate auction market suffers worst result in more than a decade

Bali News and Views Editor's Comments:

Editor,Lawrence with over 40 years of real estate experience

Just one more market that I predicted last year would fall is the Australian market, and it's falling heavily.

In just one year we've gone from I don't believe it, to Maybe it's happening, to My God how far is going to drop?

The answer to the last question is it is going to drop a lot because is vastly overpriced and does not pass my acid test regarding rental prices and home prices._______________________________

Sydney's auction clearance rate has plunged to 39.4 per cent. Peter Rae

Share on twitterby Ingrid Fuary-Wagner

Sydney's auction market has recorded its worst result in more than a decade, with just 39.4 per cent of homes selling under the hammer the weekend before last.

It took longer than usual for the revised auction results to provide an accurate reading of the market, with many real estate agents initially withholding their poor results.

A fortnight ago Domain Group's preliminary auction clearance rate was 44.5 per cent but one week later, after further results were collected, it was revised down to just 39.4 per cent.

Real estate agents who successfully sell homes at auction tend to be quicker to draw attention to the positive results they've achieved. Those with poor sales results are less likely to disclose the bad news. In a market downturn, final clearance rates tend to be revised lower than the initial figure.

The city's clearance rate had hovered around 50 per cent since May but worsened in recent weeks.

"It's a game of real estate tug of war at the moment. You've got sellers who want as much as they can get, and buyers who are listening to the overall sentiment in the market, and then you've got market value somewhere in between," Jason Andrew, CEO of Ray White NSW, said.

Mr Andrew said the buyer pool in Sydney had certainly diminished as mortgage brokers analysed buyer finances "with a fine tooth comb".

"Gone are the days when people who should not have been buying were, but we should not be benchmarking this market on the market we've just come out of, which was the best real estate market Australia has ever seen," Mr Andrew said.

With a federal election on the horizon and the Labor Party running a campaign to limit negative gearing, Mr Andrews expected Sydney prices to continue to soften before a build-up of opportunists entering the market increased competition.

"The tell-tale sign will be in July-August next year and whether we can get past that period relatively unscathed and into spring," he said.

Other than another 39.4 per cent clearance rate recorded over a weekend in July 2008, Domain Group data analyst Nicola Powell said this "particularly low" result hadn't been seen since the 2004-2006 downturn.

"At that time there were interest rate rises, which began in 2003, and the population was declining. We don't have either of those dynamics at the moment – interest rates are on hold and Sydney's population is growing," Dr Powell said.

Instead the current property market downturn has been driven by increased regulation affecting the accessibility of credit, forcing investors to retreat from the market.

Homeowners are currently more hesitant to list their properties in the current climate, while old listings are languishing on the market with the average number of days it takes to sell a home blowing out to 76 from 47 a year earlier.

"We're seeing new listings decline on annual basis but we're seeing a build up of total stock on the market, so homes are taking longer to sell," Dr Powell said.

This week's preliminary clearance rate for Sydney is 47.9 per cent but it is likely to fall further by week's end.

"You'd be foolish to think part of the market doesn't expect that [prices will continue to fall], but other buyers, when they see good real estate, are happy to respond and pay a fair price," Bresic Whitney's head auctioneer Gavin Croft said.

"There's certainly more of a 'settlement period' where people are trying to find their feet and to understand whether they can sit tight or whether they need to act quickly and I anticipate that will continue to the end of the year."

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Bali seminar attendees January 2018

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      Limited Seating & Free Parking: 

      Seating is very limited for these free seminars so please avoid disappointment and make reservations A.S.A.P. Click Here For a Reservation

      Or Email: or Tel: Office: 62-361- 284069 For Bahasa English 62-8123814014 – Bahasa Indonesia or 62-8123632177

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