Advice As Sydney Auction Rate Slows
You’ve seen the news. You’ve read the hype. Sydney’s faltering auction clearance rate fell to below 60% at the weekend hitting a 3 year low. This is a steep decline considering the rates were close to 90% just a few months ago. Senior economist, Dr Andrew Wilson of Domain Group is warning that Sydney’s auction clearance rates could fall even further by Christmas with around 6000 auctions still scheduled before the end of the year.
Why the Slowdown?
Investors have backtracked, spooked by dwindling rental returns and higher interest rates. This, coupled with a large amount of stock hitting the market this spring has caused the market to cool.
What this means?
Of course, much has been made of the auction clearance rate figures yet they are just one gauge of the strength of the property market. Other indicators include the median house prices and the number of days on market. These statistics take longer to track which is why the media likes to report the auction clearance rates every Saturday with the same enthusiasm as reporting the football results.
Nonetheless, after 2 years of strong capital growth, the tables have finally turned in favour of buyers and we are finding:
- A greater volume of stock to choose from.
- Fewer buyers and less competition.
- More time to consider the options, carry out the research and undertake due diligence.
- The best buying conditions for purchasers in at least 18 months.
- A number of prospective buyers have told us that they intend to delay their searches until after the New Year. If everyone does the same thing, you are likely to find prices will be better now than after the New Year.
Whilst buyer confidence has been hit by higher mortgage rates, the fundamentals remain sound with the housing shortage and migration levels continuing. A number of experts and analysts are still predicting positive capital growth figures throughout 2016.
If you want to take advantage of the best buying conditions in at least 18 months call me today on 0405 134 645.