Sydney's preliminary auction clearance rate was 49 per cent, with 222 auctions withdrawn. A Wollstonecraft two-bedroom apartment passed in and sold after the auction for $1,197,500, with one registered bidder who did not bid.
On Saturday, a two-bedroom apartment in Wollstonecraft passed in after its single registered bidder did not bid; a vendor bid at the $1.16 million guide was placed. After an hour of post-auction negotiations, it sold to a first-home buyer for $1,197,500, $12,500 below its $1.21 million reserve. The vendors were investors from the North Shore.
Selling agent Stuart Howard of Marriott Lane Real Estate said post-auction offers were happening quite often. “People are turning up, waiting a bit, and then they make an offer after the auction,” he said. “It’s happening quite often. People are cautious. Buyers are cautious in how much they’re paying for properties because of the interest rate rises.”
There were 964 auctions scheduled in Sydney for the week. By Saturday evening, Domain had recorded a preliminary clearance rate of 49 per cent from 571 reported results, with 222 withdrawn. Withdrawn auctions are counted as unsold when calculating the rate.
In Penshurst, a five-bedroom house marketed as “two homes under one roof” sold under the hammer for $2.4 million, $40,000 above its $2.36 million reserve, to buyers upsizing from Panania. Three of four registered parties competed, with bidding opening at $2 million. The house drew interest from parties seeking multi-generational living; selling agent Haydon Sacilotto of Ray White Georges River said this was the main marketing ploy.
In Crows Nest, a two-bedroom character semi at 100 Atchison Street, guided at $1.8 million, sold for $1.92 million. Three parties registered, all downsizers; bidding opened at the $1.8 million reserve. Auctioneer Ed Riley said the result "demonstrates that buyer demand hasn’t disappeared, it’s simply becoming more selective".
Dr Shane Oliver, chief economist at AMP, called the 49 per cent clearance rate “fairly stable” but still “extremely weak”. He noted that listings were well down on a year ago, which was helping prevent a steeper fall in the rate. “People are holding on … vendors at present aren’t in a big hurry to sell,” he said, adding that each rate rise also carried potential for distressed sales.
Analysis
Why This Matters
- The 49 per cent clearance rate suggests buyer demand remains subdued despite lower supply, signalling a protracted market downturn in Sydney.
- Post-auction negotiations are becoming the norm, reducing the pressure on buyers but also creating uncertainty for vendors expecting a straightforward sale.
- Each interest rate rise raises the risk of distressed sales, though vendors so far appear to be holding on rather than rushing to sell.
Background
Sydney’s auction clearance rate has been under pressure since the Reserve Bank began raising interest rates in 2022. The latest rate rise (the fifth in this cycle) was announced earlier in the week. Domain’s weekly clearance rates have been trending near or below 50 per cent, a level typically associated with a weak market. Withdrawn auctions, a measure of seller reluctance, remain high.
Key Perspectives
Stuart Howard (selling agent, Marriott Lane Real Estate): says buyers are cautious and post-auction sales are happening often because of interest rate rises; the process reduces buyer pressure while still pleasing vendors.
Dr Shane Oliver (chief economist, AMP): says the clearance rate is "extremely weak" but fairly stable; listings being down a year ago prevents a sharper fall; each rate rise carries a potential for distressed sales.
Auctioneer Ed Riley: says buyer demand has not disappeared but has become more selective.
What to Watch
- Whether the clearance rate falls below 45 per cent if another rate rise occurs.
- The volume of withdrawn auctions: a sharp decline would indicate vendors becoming more willing to sell, potentially pushing prices down further.
- Any signs of rising distressed sales, which would accelerate the market correction.
Checked
12 claims in this story checked against 1 source: 11 supported.
Show each claim
- SupportedSydney’s preliminary auction clearance rate was 49 per cent.The Age - Latest News: “By Saturday evening, Domain recorded a preliminary auction clearance rate of 49 per cent from 571 reported results throughout the week”
- SupportedThe 49 per cent clearance rate was weak.The Age - Latest News: “Chief economist at AMP, Dr Shane Oliver said Domain’s clearance rate of 49 per cent for Sydney is “fairly stable” but still “extremely weak”.”
- Partly supportedBuyers’ caution explains the weak clearance rate.The Age - Latest News: ““People are cautious. Buyers are cautious in how much they’re paying for properties because of the interest rate rises.””
- SupportedA Wollstonecraft apartment passed in and sold after the auction for less than its reserve.The Age - Latest News: “Investors sold a two-bedroom apartment in Wollstonecraft to a first home buyer post-auction for $1,197,500 after an hour of negotiations on Saturday.”
- SupportedThe Wollstonecraft apartment sold for $1,197,500, $12,500 below its $1.21 million reserve.The Age - Latest News: “The reserve was $1.21 million.”
- SupportedThe Wollstonecraft apartment had one registered bidder, who did not bid, and a vendor bid was placed at the $1.16 million guide.The Age - Latest News: “As only one person registered for the Wollstonecraft home and did not make a bid, a vendor bid at the price guide of $1.16 million was placed.”
- SupportedStuart Howard said, “People are turning up, waiting a bit, and then they make an offer after the auction,” and that it was happening quite often and buyers were cautious because of interest rate rises.The Age - Latest News: ““People are turning up, waiting a bit, and then they make an offer after the auction,” selling agent Stuart Howard from Marriott Lane Real Estate said. “It’s happening quite often. “People are cautious. Buyers are cautious in how much they’re paying for properties because of the interest rate rises.””
- SupportedSydney had 222 withdrawn auctions.The Age - Latest News: “while 222 auctions were withdrawn.”
- SupportedThe Penshurst house sold for $2.4 million, $40,000 above its reserve, to buyers upsizing from Panania.The Age - Latest News: “it sold for $2.4 million, $40,000 above its $2.36 million reserve. ... The buyers are upsizing from Panania”
- SupportedThe Crows Nest semi sold for $1.92 million; all three registered parties were downsizers.The Age - Latest News: “In Crows Nest a two-bedroom character filled semi at 100 Atchison Street guided at $1.8 million sold for $1.92 million. Three registered and two locals participated ... All were downsizers.”
- SupportedEd Riley said the result “demonstrates that buyer demand hasn’t disappeared, it’s simply becoming more selective”.The Age - Latest News: “Auctioneer Ed Riley said the result, “demonstrates that buyer demand hasn’t disappeared, it’s simply becoming more selective”.”
- SupportedDr Shane Oliver called the 49 per cent clearance rate “fairly stable” but “extremely weak”.The Age - Latest News: “Chief economist at AMP, Dr Shane Oliver said Domain’s clearance rate of 49 per cent for Sydney is “fairly stable” but still “extremely weak”.”