Throughout the first month of winter, we saw the property market continue to transition away from booming conditions and settle into a more balanced trading environment.


We always refer to auction results in order to best measure the success and mood of the market. During June we saw the clearance rate drop back with the majority of properties being auctioned seeing some pressure to meet seller expectations. Whilst the media reported a clearance rate around the 70% mark, as more results filtered through each week the clearance rate was much closer to 65%, suggesting buyers have lost a degree of confidence and bank tightening on lending is having an impact.

As the market does transition, there is often a period when a considerable gap can open up between how buyers and sellers perceive market conditions. Buyers have a tendency to be extremely bearish when there is evidence of the market softening whilst sellers tend to remain a bit more optimistic. As a result, June may very well be the month when seller expectations versus the buyer reaction to the market are at its widest point. Unfortunately, many buyers can become so focused on what the market may and may not be doing that they forget certain properties of interest represent value and meet their criteria. We saw such behaviour at a number of auctions during June when interested buyers wanted to either place an unrealistic bid or not bid at all and once the property passed in all of a sudden, they wanted to make stronger offers.

In our view, if market conditions continue to settle into the present rhythm, then it is simply a normal trading market. Sellers will need to tighten up their price expectations and be more realistic because the booming conditions have ended. However, buyers will also need to stay engaged and still move quickly if they locate a suitable home. We’re still seeing marque homes sell extremely well whilst properties with challenges are taking a bit longer to sell. We’re also seeing no change in prices being achieved across the board with the watermark that was set in February holding firm. If anything, the major difference we have seen during June is there are fewer active buyers at auctions but no other serious change.

It was only two months ago that buyers had immense confidence in the market and the auction clearance rate was pegged at 85% and nudging 90%.

There is a shift in confidence but that’s the only noticeable change in the market. We’ll be watching closely to see whether the market finds its new footing in July or continues to fluctuate.


This month’s signature performers:


                           14 Hopewell Street, Paddington | $2.220m



                            10 Hampton Street, Balmain | $1.805m



                           47 Foucart Street, Rozelle | Undisclosed 



                          9 Day Street, Drummoyne | $2.925m




Posted in General, Monthly Market Wrap, Property on 30th June, 2017