Sydney auction volumes have halved compared to this time last year as uncertain vendors have moved across to private treaty sales according to an expert.
According to the Cooley Index, the number of auctions the independent auctioneering company held across Sydney fell from 583 in November 2021 to 260 this year.
Auction clearance rates have also fallen from 69 per cent to 62 per cent in the past 12 months, while the properties achieved an average $8876 over reserve compared to $114,796 in 2021.
Cooley Auctions Chief Executive Officer Damien Cooley said auction volume had dropped sharply, but that’s coming off the back of a very strong end of 2021.
“I think people have been shying away from auctioning and putting their property on the market private treaty,” Mr Cooley said.
“As a result, that’s affected the auction volume, but more people are now also starting to come back to auction because they’re seeing that results have been achieved and the results are good.
“With a few of these results that are happening now they are setting new benchmarks for prices and as more properties sell and new prices are being achieved that gives people a bit more confidence.
“There has been a lot of uncertainty, and nerves about the market tanking and many people were sitting on the fence, but as they see a few sales taking place it gives buyers a bit more confidence to step in and buy.”
Mr Cooley said there were signs that sentiment was starting to change with vendors again finding some confidence.
“It feels like there is a little bit of improvement in the market at the moment,” Mr Cooley said.
“Vendors are being a lot more realistic about where they are setting their reserves, so they’re meeting the market more.
“There’s also a genuine lack of stock on the market right now.”
According to Mr Cooley, he’s still been seeing incredibly strong results with high-quailty properties.
“Good quality properties right now are still selling unbelievably well,” he said.
“One auction my team had last week, there was a significant amount of interest, it was a one-bedroom unit in Point Piper, and it sold for a lot over reserve.
“Good quality properties are still selling really well and they’re not being discounted.”
Mr Cooley said he expected a good amount of property coming onto the market in the new year.
“Those vendors that are thinking about selling in the new year will come on early,” he said.
“We’re already speaking to our clients who will be listing properties early, aiming for mid-February auctions.
“There’s a lot of people who will want to try and beat the Easter rush because that’s going to be a busy time.”
Mr Cooley said he expected a lot of vendors would move away from private treaty in 2023.
“There will still be a lot of private treaty sales, but more and more people are realising that auction is delivering a good result in a shorter period of time by creating more urgency for buyers to make a decision,” he said.
“We’ve had a couple of scenarios play out recently where buyers have made offers on properties and they’ve fallen over due to the fact the valuation has come in at a lower rate than the price agreed – we call that valuation risk.
“But at an auction when the hammer drops, that’s the price and valuers put that price on it.”