When high-profile Sydney real estate commentator Tom Panos stood outside a luxury five-bedroom home in Merrylands, NSW with a price guide of $2.8 million to $2.85 million and announced that not a single buyer had registered to bid, he unleashed a dire warning across the property sector.
Touring the empty driveway in a social media video, Tom declared that the Sydney auction market had “frozen” and collapsed to levels not seen since the depth of the 1991 recession.
“I’ve been auctioning property for 30 years and I’ve been in real estate for nearly 40 years,” Panos said. “Through the early 90s, the recession, then we have GFC, then Covid, and every correction in between… This is the lowest level of auction activity I’ve experienced myself. I think this is the lowest since 1991. Here we are again; second week, no regos. Nothing’s going to sell.”
He pointed out that even encouraging macro news, such as headline inflation easing to 3.9 per cent, failed to move the needle.
“Normally, that sort of news gives some sort of confidence. Not this time. People are just clocked out. To me, this tells us something big is going on. Buyers aren’t just worried about interest rates. They’re worried about confidence. They’re worried about policy. They’re worried about making a decision. Markets don’t collapse overnight. They freeze, and they’ve frozen.”
Yet David McMahon, Head of Auctions at Ray White NSW & ACT, offers a strikingly different diagnosis. He says the market is neither collapsing nor in an unprecedented death spiral.
Instead, David argues it has reached a new normal where the difference between a successful sale and a total stalemate comes down to strategy and process rather than sentiment.
“My summary on the market at the moment is that it’s not a suburb-by-suburb or region-by-region driven market,” he says. “It’s really an agent-by-agent market.
“What I mean by that is that there are agents who are still using data to make better decisions around process. Typically, what we’re finding is, yes, the auction market has softened, but the private treaty market has softened far more than auctions.”
David points out that while high-profile passed-in properties generate dramatic headlines, the underlying mechanics of real estate transactions tell a far more nuanced story.
In July, Ray White scheduled 644 auctions across NSW and ACT- a 24 per cent drop compared to the same time last year. Yet despite bidder numbers dropping 44 per cent to an average of 2.7 registered participants per event, clearance rates remained remarkably firm at 68 per cent.
“Auction creates a structure and a strategy and a deadline which creates urgency to the marketplace,” David explains.
“In a market that has become quite hesitant, that becomes even more important. One thing we talk about a lot at Ray White is that auction is not just about a day, it is about a strategy, the same way private treaty is not just about a day. We actually look at clearance rate more so at day 45 than we do at day 30 now because we feel as if that’s a better marker of how the market is performing.”
For David, judging an entire market’s health purely by what occurs during a 10-minute window on a Saturday morning misunderstands the entire campaign life cycle.
Auction campaigns provide sellers with three distinct opportunities to transact: prior to the event (which accounted for 18 per cent of Ray White’s July sales), under the hammer, or during the two to three weeks immediately following. All three pathways yield valid, market-value transactions.
The single-bidder reality
When agents and auctioneers walk out onto a driveway only to find a single registered bidder, many view it as an immediate failure, but David argues that this mindset is precisely where real estate professionals go wrong.
Data from July reveals that 53 per cent of single-bidder auctions still result in a successful sale under the hammer.
“One-buyer auctions are actually really common regardless of if the market is up, down, sideways, or diagonal,” David says.
“The language I use is: it’s not how many you have, it’s who you have. If you have one right buyer, you can get just as strong a result as if you had five maybe not-so-right buyers. If a reserve is a million dollars and vendors say, ‘We’ve only got one, we’re not going to get there,’ I say, ‘What if they pay 1.2?’ Let’s give them the opportunity.”
From a buyer’s perspective, being the sole registered bidder eliminates the high-pressure environment of competitive bidding while offering a rare chance to negotiate directly and transparently with a vendor. For the seller, it delivers an unconditional contract once an agreement on price is struck.
Cutting through the market noise
David argues that the friction currently present in the property market stems less from macroeconomic fears and more from a refusal by some industry players and clients to accept that the frantic, double-digit growth of recent years is over.
“Every Saturday I go to eight to ten auctions, and I walk into some offices where conversations are, ‘Oh, the market’s changing, it’s getting worse,’” he says. “And then I go into offices where agents are like, ‘Yep, the market’s changed, but here’s what we’ve done about it.’ They’re the ones having success.”
He compares the current landscape to an unexpected change in the weather: “It’s like walking outside and going, ‘Jees, it looks like it’s going to rain’ compared to ‘It’s raining, let’s take an umbrella.’ The ones that have accepted it’s raining say, ‘Cool, let’s bring an umbrella, let’s actually have a plan for this.’”
When counselling vendors who are nervous about media reports of plummeting clearance rates and market freezes, David advocates removing emotional terminology altogether and presenting raw performance metrics.
“The key thing in conversations we have at the moment is: let’s provide you two options on how we can get you sold,” David says.
“One of those has a clearance rate of 75 per cent and average days on market of 30. One has a clearance rate of 50 to 55 per cent and average days on market of 40 to 45. Which of those would you prefer? When you remove the words ‘auction’ and ‘private treaty’, the first option was auction. Private treaties are taking about ten days longer to sell, and their clearance rate is 15 to 20 per cent less compared to auction within a certain time period.”
Acceptance must extend across all sides of the transaction and vendors must acknowledge that their property may not command its mid-boom valuation, while buyers must adapt to altered borrowing capacities enforced by lenders.
Yet David maintains that those actively participating in today’s market are among the most qualified and determined participants seen in years.
“Every buyer that’s wanting to buy now is serious because they’re buying, understanding how the current market is performing,” he says.
“If they’re financially approved and going to a broker, they are seriously looking to purchase. And every seller looking to sell at the moment is serious as well. They’ve come to the market with a lot of uncertainty, but they have a genuine desire or motivation to transact.”
As rate speculation and economic commentary continue to flood the news cycle, David believes success in the months ahead will rely heavily on agents raising their professional standards, tuning out macro noise, and guiding nervous clients with grounded regional data.
“It’s quite clear that the market has changed, and I keep saying the word changed rather than changing,” David says.
“We’ve just gone through a huge boom over the last four to five years that was unforeseen and maybe will never happen again, so naturally, there had to be a correction. Buying a house is a big decision in someone’s life, and people need confidence. Don’t get too caught up in the noise, just provide really good service, provide really good information, and allow people to make well-informed decisions.”