Property market’s Super Saturday turns sour after another weekend of poor auction results

The property market has suffered another blow over the weekend, with clearance rates remaining in the 50s in both Sydney and Melbourne, despite hopes that hundreds of new listings would help bring out more buyers and drive up demand.   Experts had anticipated the weekend would be one of the busiest of the year, with few distractions such as the football or other events to keep prospective buyers away, but the results solidify the view that the market has well and truly halted.

APM chief economist Andrew Wilson says the results were poor, and suspects more activity is happening once auctions have finished.

“The auction culture has really changed, I believe. We’ve had less competition, fewer buyers, but I think there is a mindset that the auction is just the entre, and not the main course.”

“I’m hearing there are a lot of post auction negotiations. The other thing to note is that we have not seen a massive increase in unsold properties. The selling is happening after the auction, that mentality has changed there.”

While Sydney recorded a clearance rate of 56.3%, according to AMP, Melbourne was the most disappointing city of the weekend – AMP reported a clearance rate of just 60.5%. According to the Real Estate Institute of Victoria, that result was only 55%, with a massive 741 properties put on the market.

While Wilson says the result does show some softness, he also notes that “it’s not too bad, considering the number of properties put on the market”.

“It isn’t that bad, but it definitely does show there is some softness in the market there. This is just simply what happens in the quiet market.”

But the results come despite a number of commentators predicting that spring would see a resurgence in home buying. So far, that hasn’t occurred, and Wilson says it will only happen when buyers feel confident about the economy.

“The market needs more buyers. That’s the whole problem – there just aren’t enough buyers.”

However, despite the disappointing results, SQM managing director Louis Christopher says he believes the clearance rates may be lower given the number of unreported auctions.

The APM figures show that out of 399 auctions in Sydney, only 216 were reported, while in Melbourne, only 154 out of 825 were reported. Christopher says a discrepancy this large may hide some telling statistics.

“Whenever there is a big bunch of unreports, it indicates the agents have had a very tough day. We don’t really know what the figures were.”

“I believe they could be a lot lower. Usually the discrepancy is bad, but this weekend was particularly serious given the number of listings.”

The APM figures showed both Adelaide and Brisbane recorded rates of 43.5%, and 29.8% respectively.