Sydney’s cooler months have seen some hot auction activity for our with the volume of homes put under the hammer outshining last year’s numbers. However, the amount of properties that sold above their set reserve price has declined.
According to our June Cooley Index for Sydney residential property, the total auction volume sat at an impressive 374 properties, considerably up from June 2016 when the we auctioned a total of 275 homes. Similarly for May, total volume also jumped from 323 homes in 2016 to 402 properties in 2017.
But on closer inspection the sold over reserve figures show Sydney’s red hot seller’s market might just be cooling down. There was a significant drop from 75 per cent of homes fetching above reserve prices in June 2016 to just 55 per cent this year.
Damien Cooley, says the trend is most likely due to a seller’s fear of missing out on a top dollar result.
“I think absolutely there’s a fear, but there’s no need for panic at all because there are new buyers entering the market all the time and things are still selling very well,” he said.
“The market has changed for a few reasons. It’s been booming for so long but the market is still good and it’s still a seller’s market,” Cooley says, adding that things were starting to look up for buyers.
“The biggest thing I have felt at the coalface is that more owners are making the decision to reduce their reserves and take prices from buyers. Whereas, in previous months, sellers were quite stubborn saying ‘Well, if they don’t pay the price we’ll just go back to market and find another buyer.’ Now owners are more likely to say, ‘Let’s take it.’”
In addition, the June Cooley Index showed that residential clearance rates kept an almost even keel, dropping slightly from 74 per cent to 71 per cent over 12 months; it also demonstrated that sold prior activity moved from 32 per cent to 36 per cent; and that the average number of registered bidders per auction has dropped from four to three in a year – another indication that buyers are gaining power.
“The drop in registered bidders is significant when you think that previously we were averaging highs of five or six bidders – it’s a definite downward trend,” he says.