Clearance rates in Sydney eased slightly over the APEC Weekend but the figures disguise a deceptively strong property market in certain areas. As vendors hold off going to market, a backlog of buyers is being created that should underpin the next four-year cycle.
Record numbers of people fled the city for the APEC long weekend, yet the market held firm with a clearance rate of 61% compared with the 71% of the previous weekend.
Sure, these rates are below other markets but clearance rates only record those properties that are going under the hammer. They are measuring only those transactions that take place on the day the auction is scheduled. The headline number doesn’t include houses sold prior to the auction, in the days after – or even as a “silent sale”, without even being advertised.
The aggregate clearance rate is not useful. Last week, for example, South Sydney’s was 49% compared with 71% of the Eastern Suburbs and the Lower North Shore.
Also holding back sales is lack of supply. Lots vendors are holding off because of the looming federal election. Property investors are finding that there is just no stock in the $450,000–850,000 range.
When first-home buyers and investors go toe-to-toe at an auction, the investors normally win because they have deeper pockets. These two types of buyers will be stimulating the market at the upper end well into next year. I predict that once the election is done and dusted then the market will just roar back to life for the next three and perhaps four years.
Peter Kelaher is a director of PK Property Search & Negotiators, a Sydney-based buyer’s agent. This story first appeared in Eureka Report.