Vendors are bracing for tough competition this weekend as auction volumes surge to a new nationwide record, with Melbourne alone hosting 2040 auctions.
Melbourne vendor Matt White said his family is optimistic about reaching the price guide of about $3.245 million when the family home at 3 Newington Grove, Caulfield North, goes under the hammer on Saturday at 2:30pm AEDT. However, he said buyer interest had waned towards the end of the campaign.
“We’ve seen the numbers drop off, as there’s a lot of competing listings at the moment,” he said.
“We knew listings will rise in spring, but we have not anticipated the extent of the surge. Although we’ve had some strong interests and a few people came for multiple inspections, we do get the sense that we are up against a lot of other properties on the market at the moment.”
SQM Research data shows a total of 5431 auctions are set to hit the market this week – the largest ever recorded in the country.
Louis Christopher, SQM Research managing director, said while listings historically rose strongly during the spring selling season, this year’s volume was unprecedented.
‘Good time to sell’
“There are significantly more listings than normal as vendors who were not able to sell during the lockdown are now able to,” he said.
“There’s also an increasing number of sellers who think now is a good time to sell while there’s still some heat in the market.”
Sydney is also poised to see its busiest auction weekend so far with 1190 homes set to go under the hammer, but this will be eclipsed by the higher number already booked for the coming week, the Domain data shows.
The huge auction volumes would test the depth of buyer demand, said Nicola Powell, Domain’s chief of research and economics. “It’s going to be a good test to see how many active buyers remain and whether the market can absorb such a high level of auctions in one hit,” she said.
“We’ve got two more weekends of high auction volumes, so it would be interesting to see how the market reacts as buyers are realising that there are more opportunities around the corner, which is a key change in the dynamics.”
Eliza Owen, CoreLogic Australia head of research said there may not be enough to soak up the flood in listings.
“I don’t think there’s enough demand to absorb the level of stock that we’re seeing across Sydney and Melbourne at the moment,” she said.
Slowdown in growth rate
“Clearance rates have been falling across these cities in the past few weeks as more listings give buyers more options and flexibility to negotiate. This week will be no different. We’re going to see further decline in auction success rate from here.
“I don’t think this is an indication of price falls just yet, but certainly a flattening out in prices and a substantial slowdown in growth rate.”
Mr Christopher said while listings were likely to rise further in the lead-up to Christmas, volumes would fall from the current levels when the markets reopen next year.
“I think the surge in listings is a temporary phenomenon fuelled by the pent-up demand from vendors,” he said.
“We’re not at the peak of the market yet. But if we see sustained surge in listings over a number of months, then that would be the tipping point. At this stage, we’re not seeing that.”
HBSC chief economist Paul Bloxham said the soaring listings, combined with the tighter macroprudential setting would combine to cool prices in the year ahead.
“We think house prices will slow to single-digit growth next year driven by the spike in listings, new supply from HomeBuilder and the tighter credit,” he said. “This combination of factors will slow the market next year.”
This article is from Australian Financial Review, please click the following link for the original article:mhttps://www.afr.com/property/residential/super-saturday-a-record-number-of-properties-going-to-auction-20211126-p59cg7