Rising interest rates, more cautious households and overseas holidays after two years at home point to lower listings and less stock on the market as the property sector takes a breather.
The combined capital city preliminary clearance rate rose less than a percentage point to 63.7 per cent over the week to Saturday even as volumes doubled, and agents said they were already fielding fewer queries about future listings.
“When the market’s building, it builds from the bottom up. When it comes off, it comes off at the top end and comes down,” said veteran Melbourne agent Greg Hocking.
“We’re getting good turnover [on properties] up to $2 million in our areas – and up to $2.5 million – but when you look above $3, $4, $5 million, we’re not seeing a lot of properties coming on to the market. There are a lot of vendors saying ‘We’re going to sit this out for the time being’.”
Mr Hocking, who focuses on inner-southern Melbourne’s premium Albert Park, said the drop-off in inquiries from potential sellers for campaigns starting in July and August wasn’t a reflection of rising rates.
“It’s sentiment that moves the quickest,” he said. “The sentiment’s moving quickly.”
The pickup in the combined capital city clearance rate from a preliminary 62.9 per cent a week earlier, later revised down to 61.3 per cent, was the first increase after five weeks of decline. The number of scheduled auctions rose to 3229, almost double the previous week’s 1672.
In Sydney, where a four-bedroom house in East Ryde sold at auction on Saturday for $1,906,000, 3.6 per cent over the $1.84 million reserve price, Belle Property Hunters Hill agent Jay Assay said conversations about future listings were not dropping off, but vendors had become more realistic.
“The aspirational vendors are definitely dropping off,” Mr Assay said.
“They’re the ones who’ll only sell if they get $3.5 million when the house is worth $2.2-$2.3 million. They’ve retreated.”
But the sales campaign for the 5 Bronhill Avenue house reflected the changing nature of the market.
“We guided sellers to $1.8 million and then adjusted it to $1.5 million because there was lukewarm interest,” Mr Assay said.
“We couldn’t comfortably sit down with the owner to say that come auction day we were going to be selling.” There’s a huge cohort of that top-end seller – they are going overseas. It’s going to be a slower winter. — Ray White Cottesloe agent Deb Brady
Lowering the guide a week and a half before the auction did bring buyers out. Seven bidders registered, three of them bid and a young family from Ryde bought the property.
“People are becoming a lot more value-driven,” Mr Assay said.
“If they don’t have a perceived sense of value, they’re not wanting to be part of a campaign.”
In Sydney, where the number of scheduled auctions more than doubled to 1112, the first 1000-plus auction week in seven weeks, the preliminary clearance rate picked up to 62.8 per cent from the previous week’s preliminary clearance rate of 61.7 per cent (later revised down to 58.4 per cent).
In Melbourne, the clearance rate from the reported 1220 results of 1460 auctions also rose to 62.9 per cent from 61.9 per cent a week earlier – a figure subsequently revised up to 62.2 per cent.
“A lot of people have pulled their properties off the market,” Melbourne buyers agent David Morrell said. “Yet those that kept going got good results.”
In Bayside Hampton, a five-bedroom family home at 18 Bolton Avenue that was advertised with a selling guide of $4.5-$4.8 million sold for $5.85 million after an auction that pitched four bidders against each other. Marshall White agent Kaine Lanyon declined to discuss the sale.
In Perth, where there were just 20 scheduled auctions – too few to provide a meaningful clearance rate – Ray White sales agent Deb Brady said listings in the city’s leafy western suburbs such as Cottesloe were likely to fall in the coming months as owners prepared to travel overseas for the first time in two years.
“There’s a huge cohort of that top-end seller – they are going overseas for at least a month, two months – a lot are going for three months,” Ms Brady said on Sunday.
“It’s going to be a slower winter. They’ll come back and then maybe we’ll be on for a strong spring season.”
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/agents-predict-fewer-listings-as-rates-rise-owners-go-overseas-20220529-p5apcc