Sydney clearance rate dive: home buyers spooked or setting up for spring?
Auction clearance rates took a dive in Sydney last weekend after remaining unseasonably high throughout the majority of winter.
According to Domain, Sydney reported an auction clearance rate of 69.4%, falling below 70% for the first time since early June and by 4.3% from the previous weekend.
The plummeting clearance rates could be a sign of a cooling market, with the ABC reporting that one in four households are currently experiencing mortgage stress, or based on previous years, it could be in response to the imminent arrival of spring, traditionally Aussies’ favourite season to sell.
With an influx of property likely to hit the market over the coming weeks, Mozo property expert, Steve Jovcevski believes that the Sydney property market will experience the usual seasonal bump.
“Winter is usually a time of limited listings and with spring just around the corner there will be more properties to choose from, so it’s not all that surprising that buyers have been more cautious,” said Jovcevski.
"More listings in spring mean potentially getting a better deal for buyers as vendors look to offload their properties before Christmas," he said.
The number of auctions was also down from a week earlier to 579 and the median auction price fell by $170,000 to $1.16 million.
The drop in clearance rates was driven by Sydney’s mid and western suburbs where clearance rates dropped as low as 38.7%.
Mozo’s spring property-buying tips:
- Inspect, inspect, inspect: See a quite a few properties and experience a bunch of auctions so you know how it all works.
- Set a budget: There’s no point in bidding beyond your borrowing capacity, so don’t do it. In most cases, you will have to produce a statement from your lender that authorises you purchase a property at the amount you win the bid for.
- Get a silent bidder: If you’re going to auction and don’t like the idea of bidding or auctions themselves but are completely in love with the place and have to have it, then ask a friend, family member or hire a professional to do it for you. Just set your limit and keep your fingers crossed!
- No cooling off: There’s no cooling off period after your final bid wins the auction. So be prepared to arrange: a pest inspection, building inspection and for your solicitor to review the contract.
- Shop around: Consider and compare all of your options with our home loan comparison tables. With some lenders now offering comparison rates under 4%, you could make serious savings over the life of your loan.
If you’re looking to get into the property market this spring, make sure you’re getting the best value out of your home loan and be sure to check out our Home Buying Guides hub where you can get tips on how to get a home loan, buying in an inflated market and the home buying mistakes to avoid.