Sydney real estate recorded auction clearance rates in June of 56%, which is probably closer to the long-term average than this time last year. However, apartments averaged 58% while property above $3 million reached above a 60% auction clearance rate. Sydney apartments enjoyed higher auction clearances as they are by and large more affordable than houses.
Tighter bank lending practices have eroded clearance rates for properties valued below $1.2 million, as well as the upper-end of the market, above $3 million. Properties valued above $3 million are less affected lending practices because owners of prestige properties usually have more equity in their assets, and therefore are required to borrow less funds to buy.
Apart from buyers finding finance harder to secure, the crucial additional factor affecting auction clearance rates across Sydney is the lack of buyer motivation and urgency. Matt Mifsud of Raine & Horne City Living commented, “This time last year buyers in a position to purchase acted with speed and the need to avoid missing out.”
Statistically in June, auction days-on-market in Sydney are far shorter than private treaty sales. Consequently, Raine & Horne agents are using the auction process not only to sell a property for a premium price but also to increase urgency among buyers before auction day and to take advantage of the fact that there is no cooling off periods for properties sold under the hammer.
Who says there is no life in Sydney real estate? In June, Raine & Horne North Sydney averaged 6-8 registered bidders per auction and 100% clearance rates when holding onsite mid-week auctions.
Since the start of 2018, the Lower North Shore property specialist averaged a 90% auction clearance rate using mid-week onsite auctions.
Better still, vendors are winning big from mid-week auctions. For example, a stunning 1-bedroom apartment at 32/94-96 Alfred Street, Milsons Point sold for $912,500, which selling agent Todd Houghton from Raine & Horne North Sydney tells me was $75,000 above reserve.
The superbly located unit attracted 15 registered bidders to the Tuesday night auction.
CEO, James Pratt Auctions International