Sydney property steams ahead

“The true test of buyer demand has been the rapid rise of homes auctioned,” Dr Powell added.

“Over August, 2,687 homes went under the hammer, an increase of 22.7 per cent from July and 27.3 per cent compared to the same month the year prior. This is the highest number of homes auctioned since pre-pandemic, which is a strong contrast given this is comparing to the autumn selling season. This is the highest number of homes auctioned in the month of August since 2015.

“The ban on public auctions as part of social distancing measures to slow the spread of COVID-19 resulted in a spike of withdrawn auctions over March and April, bouncing to record-high levels. Removing all of the withdrawn auctions from the scheduled auction count reveals that from March through to August, the total number of homes going to auction has remained relatively the same compared to the same six months last year, down a marginal 2.1 per cent.

“This highlights the fact that while the most recent months have seen a huge uplift in homes auctioned, when averaged out across the six months, they have remained similar.”

Heightened scope

Another positive sign for Sydney is that sellers are finding buyers before auction, Dr Powell said. 

“Sydney has an elevated cohort of sellers who are accepting an offer before the auction day. Based on the decade average, roughly one-quarter of homes find a buyer before the auction hammer falls. This trend has risen in recent months, and is now at 26 per cent,” she said.

“The proportion of scheduled auctions selling prior has been elevated since prior to the pandemic, although the coronavirus crisis did accelerate this trend.

"For some areas it could signal that the buyer pool is not deep enough for a competitive auction, or vendors are being attracted to a quick sale given the changing health and economic outlook, or it could be a new hybrid method of selling that hinges on a strong auction marketing campaign sealing a quicker sale.”

Houses v units

In particularly good news for some investors, houses are currently outperforming units in the harbour city, according to Dr Powell, who noted:

“Historically, units tend to produce higher monthly clearance rates compared to houses, but in recent months it has been the reverse. Houses have outperformed units for three consecutive months and the divergence appears to be accelerating. 

“For houses, the clearance rate was 62.5 per cent, which is the highest since February. This is a 2.8 percentage point improvement from July, although it is down 8.5 percentage points on last year.

“For units, the clearance rate of 53.3 per cent fell 1.1 percentage points from July and is 17.2 percentage points below last year.

“The difference in clearance rates has nudged further apart, with houses 9.2 percentage points higher than units. This is the steepest difference favouring houses in more than two decades (excluding the month of January).”