The soaring housing markets in Sydney and Melbourne will be put to the test next weekend as more than 2000 homes go under the hammer in the biggest auction weekend for September.
Vendors will race to sell their homes on the weekend before the AFL and NRL grand finals, when footy fans in both cities will be too distracted to take part in auction bidding.
The September “Super Saturday’’ will see about 1100 homes put up for auction in Melbourne, and about 1000 homes in Sydney will test the appetite of bidders.
The weekend is seen as a bellwether for a market that appears to be cooling as regulatory pressures on investor lending take hold.
Sydney clearance rates last week were the lowest for the year, at 75 per cent, while less than 74 per cent of homes auctioned in Melbourne attracted a buyer.
MacroPlan Dimasi chief economist Jason Anderson said the Super Saturday weekend, starting on the 26th, would be a prelude to how the market would perform for the rest of spring and into summer.
Mr Anderson expects Melbourne clearance rates to overtake Sydney’s for the first time in the growth cycle. He said feverish demand for Sydney property would correct, leaving the more moderate Victorian capital with better numbers for the rest of the year. “I don’t think it will happen this weekend but I do think it will happen in October.
“When you’re coming off a period of really strong growth, when you start to level out, things change very quickly.
“That’s how the market has adjusted in the past and it changes people’s attitude.”
Mr Anderson noted that southwestern and northwestern suburbs in Sydney had slowed in recent weeks, but the market that would indicate Sydney more broadly was the inner west. “The real action is in the inner west — it is the core of where the cycle began and I can definitely can see clearance rates dropping below 70. If buyer demand is going to be there and sustained in the rest of the year, you would need to see it in that area next weekend.”
Australian Property Monitors senior economist Andrew Wilson said the outer suburbs in Sydney had become a buyers’ market, which happens when clearance rates drop below 70 per cent.
Dr Wilson said Melbourne’s middle-ring and eastern suburbs were strong, while the CBD apartment market was weak.
“Inner-city apartments are failing to sell, and that has been dragging the clearance rate down,” Dr Wilson said.
This article first appeared in The Australian Business Review