Auctions fading to black in Sydney outer: Pete Wargent
Pete WargentDecember 17, 2020
Auction clearance rates are still booming along in Sydney's eastern suburbs, with a preliminary clearance rate of 84.3% recorded, with the inner west also on fire at 83.8%, according to CoreLogic-RP Data.
Cameron Kusher of CoreLogic-RP Data has pointed out that every sub-region of Sydney has recorded auction clearance rates of above 80% at some point this year.
How then has the city-wide clearance rate slipped all the way back to 64.4%?
The unfortunate truth is that those suckered in to buying late in the cycle in outer western (30 per cent) and south-western Sydney (52.8 per cent) may well soon be sitting on a pile of negative equity, while home loan arrears have tended to be more elevated too.
No real surprises here.
No real surprises here.
Soft preliminary clearance rates were also recorded for the Central Coast (30%), Baulkham Hills & Hawkesbury (38.5%), Blacktown (42.1%), and Parramatta (39.7%), while the outer south-west may fail to record a single auction sale.
Of course, not all properties are sold at auction, and preliminary clearance rates by sub-region are essentially only an indicator of market sentiment.
Deutsche Bank has put out a research note which indicates that historically Sydney auction clearance rates have needed to decline to around 45% in order to be accompanied by year-on-year price declines.
While certain inner suburban clearance rates remain very high as noted above, the above figures represent further evidence that in many areas away from the inner suburbs the investor market has been knocked for six by increased deposit requirements, and stock on market is now rising.
Sydney will have some big auction weekends to muddle through before the Christmas break, in the meantime watch out for any handover to owner-occupier mortgage lending.
PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.
His latest book is Four Green Houses and a Red Hotel.
Pete Wargent
Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.
