Sydney price correction ‘close to an end’

The NSW capital’s auction clearance rate hit its highest point in over two years last month, suggesting a market rebound, a new Domain report showed.

According to Domain’s Sydney auction report card: July 2019, the clearance rate for Sydney auctions hit 69 per cent in July, the highest clearance rate recorded since 2017.

The report stated that the rate improved compared to June’s 60 per cent clearance, and is well above the record low of below 40 per cent recorded in December 2018.

A clearance rate of more than 65 per cent has “historically aligned with rising property prices in Sydney”, according to the report, and the improved rate is “a clear sign the market has rebounded”.

On the other hand, auction numbers remain low, with 1,351 scheduled auctions in the month of July, 23 per cent below July 2018.

“With prices likely close to the bottom, vendors are reluctant to sell unless they have to,” the report stated.

However, it is believed that should prices start to rise, auction volumes may start to also increase.

The report also shows a decline in the number of properties withdrawn from auction.

July saw a withdrawal rate of 12 per cent, down from the peak withdrawal rate of 29 per cent in December 2018.

Domain suggested that a lower withdrawal rate is another sign of a strengthening housing market.

Around one in four vendors decided to sell prior to auction, which is “higher than in late 2018 and close to the average of the boom years of 2013 to 2016,” the report stated.

The 60 per cent clearance rate recorded in June rose to 66 per cent, including sales secured within the two-week time frame after the auction, increasing to 73 per cent by eight weeks, according to Domain.

These figures are expected to increase as more information is made available.

From Mortgage Business

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