With 943 auctions listed, Melbourne booked a preliminary clearance rate of 53.7 per cent. That was up on last week’s final clearance rate of 49.2 per cent across just 216 auctions over the Labour Day long weekend.
Final figures for Sydney are also expected to be revised lower, with preliminary results showing a 63.1 per cent clearance rate from 634 auctions, up from 52.3 per cent across a higher volume of auctions last week.
In Brisbane the clearance rate stepped up from the previous week to 43.3 per cent from 104 auctions listed. Adelaide fell from the previous week to 54.8 per cent from105 auctions listed.
“The numbers are still well down on where we were this time last year in terms of just listings,” said SQM Research’s Louis Christopher.
“Anything below 50 per cent at this time of year, it’s a very weak result. To me that is evidence the market is still falling.”
The property clock is already taking its toll. As revealed by AFR Weekend, values in Sydney have already wound back to June 2016 levels, a fall of 13.2 per cent since they peaked in July 2017. In Melbourne, prices are back to the same level as they were in November 2016, with prices falling 9.6 per cent so far. If the market falls 25 per cent, as some economists have forecast, more than 850,000 home buyers could be left with properties worth less than what they paid.
Vendors are taking heed. In Sydney’s inner-west a 3-bedroom home in Lewisham sold under the hammer for $1,292,500 after its owners decided to sacrifice their reserve of $1.3 million to make the sale.
Rhonda Yim and Benjamin Martin of Belle Property Annandale worked hard at both ends to get the auction of 12 Toothill Street over the line.
“We got them to increase their bid. Then the vendors decided to meet the market there and readjust their reserve and sell it under the hammer,” Ms Yim said.
“With the market changing they probably thought it was a good time to sell.
“They were in a good position. It sold well. They got more than what they paid in 2014. We are seeing a lot of people selling who bought in 2015 and 2016 and you see that they are actually losing money.
“A lot of people are a little bit scared that they need to sell earlier rather than later.”
While the fear of not getting out – FONGO – fast enough to preserve their capital has motivated some sellers, for others who are slower to accept the falling market, fear turns to regret.
“There have been people who overestimated the strength of the market,” said SQM Research’s Mr Christopher.
“They’ve refused to accept what the market offered them. Then they’ve come back some months later and they’ve adjusted and are willing to meet the market but unfortunately for them the market has fallen even further.
“There’s quite a lot of sellers in that camp. There’s a fair degree of seller’s remorse: people who wished they got out at the point they originally refused a bid.”
In Melbourne, buyer’s agent David Morrell said some vendors are still pitching properties too far above the market and are yet to recalibrate their expectations. With uncertainty as the federal election looms, buyers are keeping their powder dry.
“The people who are actually selling are meeting the market head-on,” Mr Morrell said.