Confidence returns to April auction market in Sydney

The confidence of agents across Sydney has been boosted after the weekend’s positive auction results.

Early indicators show the clearance rate sitting at 58 per cent with expectations it will remain at 50 per cent or above once the figures are finalised later this week.

While auction sales were buoyant at the weekend, a new trend has emerged in the first four months of 2019; a growing number of homes and units have been selling before auction.

Some Sydney agents report seeing more than double the amount of pre-auction sales compared with last year.

Domain senior research analyst Nicola Powell said the nature of the slowing market across Sydney meant sales before auction were becoming more desirable for vendors.

“A-grade properties are still going to auction and achieve some good prices,” Dr Powell said.

“There were a couple of houses that went above reserve this weekend and that is unusual in this market.”

Ben Mitchell, auctioneer with LJ Hooker in Sydney, said his own figures from this time last year showed 10 per cent of homes listed for auction were selling prior – this year it was 26 per cent.

Finance was still causing issues for buyers. Some were still having issues obtaining money from the banks due to stricter lending conditions leaving them unable to bid.

Others were still trying to get the ultimate bargain with their money.

“Vendors have had to negotiate down to meet the market, but the sentiment out there is buyers are coming to the market, but they’re hoping for more off the price,” Mitchell said.

Despite this, there were good sales for the groups with an “entry level” three-bedroom, semi-detached house at 67a Belmont Street, Mosman, selling for $2.1 million – it had a price guide of $1.8 million.

Mitchell said it had a higher than expected number of buyers – with seven registered bidders fighting it out for the home.

The buyer was a woman looking to downsize. It was a great buy given Mosman’s usual prices.

“You can’t really get into Mosman for anything sub $2.5 million-$3 million,” Mitchell said.

Likewise a property at 47 Harrow Road, Stanmore, attracted four registered bidders. The three-bedroom, two-bathroom property sold for $1.35 million.

Other A-grade properties that sold in Sydney included a $7.7 million sale for a five-bedroom, four-bathroom 60-62 Caledonia Street, Paddington, and another for $5.65 million for a four-bedroom, three-bathroom home at 67 Wallaroy Road, Woollhara.

The Agency’s chief auctioneer and national sales director, Thomas McGlynn, said overall it was a good weekend for auction sales with many selling at all price points.

However, there  were still some problems for those holding on to price expectations from the property boom of two years ago.

“The only thing stopping sellers is holding on to high-price expectations,” McGlynn said.

Most buyers were flocking to where sellers were meeting buyers expectations on price, he said.

A good example was the auction of 18 Julian Street, Willoughby, which sold for $200,000 above reserve on Saturday.

The vendors of the three-bedroom Federation-style home had priced it at $1.7 million but it sold for $1.9 million.

No doubt Sydney agents hope the early April results are a sign of good things to come for the rest of 2019.

Dr Powell said some stability could return to the market following the result of the Federal election in May, and more decisions by the Reserve Bank of Australia to cut interest rates.

“The outcome of the election is going to be a key thing,” she said. “It could spark investor activity with investors wanting to buy before new [negative-gearing] rules come into place.”