Only one in four Sydney properties scheduled for auction are actually selling under the hammer
This home on Northumberland Court in Castle Hill passed in at auction.
Seeing the hammer drop at an auction is becoming a rarer sight across Sydney amid a dramatic market slowdown.
Preliminary indicators from the last week of sales showed only about one in four of the Sydney homes scheduled to go to auction actually sold under the hammer.
The bulk of the properties were instead withdrawn from auction before bidding could take place or the properties sold in pre-auction deals – both were normally a sign of lacklustre bidder interest.
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These sales comprised just over half the results collected last week, while properties that passed in at auction accounted for an additional 18 per cent of results.
Withdrawals and pre-auction deals also accounted for the bulk of auction results reported over much of May.
This Parsonage Rd house in Castle Hill also passed in at auction.
Agents reported to The Daily Telegraph that inflated seller expectations were a common theme among the properties that passed in at auction.
Many of these sellers had their properties appraised months ago when the market was much stronger, but did not adjust their expectations to the current environment.
Sellers who “met the market” by dropping their expectations, either before or during auction, were much more likely to sell.
It comes as PropTrack data showed Sydney’s median price dropped for the second successive month over May.
The fall was minor at about 0.29 per cent, but signalled a large shift for the market considering prices skyrocketed at the third fastest annual rate in 150 years over 2021.
The Sydney fall was also the largest among capital cities for the period.
This Gladesville also passed in.
With more interest rate rises expected to slow buyer demand, property pundits warned sellers may be under more pressure to cut their prices as the year drags on.
SQM Research figures released Monday showed there has been a sharp increase in the number of sellers who have been trying to offload their properties for more than six months.
The number of listings older than 180 days bounced up 9.6 per cent over May, SQM revealed.
Analyst Louis Christopher said more older listings was a “phenomenon” that often happened during market slowdowns.
“A number of properties which were already listed struggled to sell over the month and that pushed up the counts of old listings,” he said.
“Our overall outlook for the market remains unchanged in that we expect price falls of up to 8 per cent this year for Melbourne and Sydney and low net single digit growth for the other cities.”
PK Property buyer’s agent Peter Kelaher said homeowners selling the best quality homes, or “A-grade” housing stock, were rarely discounting their properties in order to sell.
The properties with the biggest price cuts tended to be dated homes requiring a renovation, or those in unpopular locations like busy roads, Mr Kelaher said.
“Keep in mind, these properties all sold well last year,” he said. “Buyers had a fear of missing out last year and went after everything.”