The property market in Sydney had a dark weekend, with auction clearance rates dropping to a new low of around 30 per cent.
It was a brutal weekend for sellers in our neighbouring state, and Domain’s Nicola Powell doubts things will improve much for the rest of 2018.
“I think this is what we are going to see for Sydney for the rest of the year,” she told Australian Financial Review.
“We are now hitting an all-time low for this downturn.”
“Once we see the full report from the royal commission into banking there will be a further tightening of lending and further deterioration of prices.”
Interestingly, SQM analyst Louis Christopher pointed out that Sydney auction clearance rates had only dropped down to the 30 per cent range on three other occasions – the global financial crisis in 2008, when NSW introduced vendor stamp duty in 2008 and in 1989 when official interest rates were 17 per cent.
Here at home, Melbourne recorded a preliminary weekend auction clearance rate of 48.6 per cent.
Reflecting the falling clearance rates are Morgan Stanley and AMP Capital who have both revised their property outlooks down in the last couple of weeks.
AMP Capital now predicts house prices in Melbourne and Sydney to suffer a peak-to-trough decline of around 20 per cent, citing low clearance rates, tighter lending restrictions and uncertainties around negative gearing and capital gains tax.
Across the country there were 2119 auctions on the weekend which was up from the previous week, but down on the same week last year. The clearance rate of 47 per cent nationally was down from the 64.7 per cent recorded at the same time last year.