Auction buyers are having more success all of a sudden. Picture: Rohan Kelly
The property market is now a buyers’ market, with a potent combination of numerous factors ending the good times for sellers.
The shift has been cemented through March with fears the Iran war’s economic impact will trigger at least one quarter of negative GDP, and at worst a recession in Australia if it stretches into a second quarter.
The immediate war ramifications, especially over fuel supply, have created dire circumstances for some employees who’ve lost their shifts and their income. Small retailers will have lost customers and revenue.
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These many lives will have been up-ended. And should they have been property market participants, hopefully they have not bought soon before they sold.
Of course the recent interest rate rise, and prospect of more, by the RBA had already prompted heightened buyer caution, especially among investors.
RBA Governor Michele Bullock hiked rates back to back. Picture: Gaye Gerard
There have also been concerns in the backdrop over mooted May Budget changes by the Federal Government to the capital gains tax discount and negative gearing.
The high cost of living, and housing and construction has increasingly unnerved the market.
Consumer confidence is the lowest on record, according to the ANZ-Roy Morgan index – the lowest since records began in 1973.
The real time weakening auction clearance rate, amid higher levels of stock and fewer bidders, is the obvious sign of the flailing market momentum.
Leading into the pre-Easter auction spike, PropTrack put the NSW success rate at 48 per cent for the past week, based on 1797 auction results. Some 386 sold at auction, and 451 sold prior to auction. Just 17 had been sold in the immediate days after the auction. Agents passed in 220 listings, but pulled 723.
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The clearance rate sat at 54 per cent in early March and, in the early bird late January market, it was at 62 per cent. There are properties, and even suburbs, and certain property types, that are succeeding against the trend, but these are fewer and fewer.
No doubt the high level of cash buyers – last estimated in 2024 as around 25 per cent – remains a key component, but these well-off buyers will presumably be careful with their money.
Auction crowd numbers are dwindling. Picture: Sam Ruttyn
Their understanding of the changed market momentum will see them play hardball on price. Sydney buyers agent Brooke Flint has been attending passed-in North Shore auctions. “Usually a single buyer is showing up,” she advises.
“Bidding is not really there, but vendors are still anchored to prices from three to six months ago.”
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Flint says the price gap is why properties are passing in.
“And once it passes in, the game changes. The crowd disappears, the serious buyer stays, the agent needs to get a deal done, and the vendor starts adjusting quietly.
“This is where the leverage sits, not on auction day, but after it.”
Flint suggests that buyers waiting for mainstream media headlines telling them “it’s a good time to buy” will be six to 12 months too late.
“Understand the market before it understands itself and you can win in this market,” she advises.
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