Credit:SMH
There is increasing hesitation among home buyers, but they are yet to return to the extended hibernation that accompanied the global financial crisis.
Sydney's weekend auction clearance rate slipped to 60 per cent, the weakest Saturday result since May last year. But it was quite a reasonable result given June auction volumes are at record levels. Historically June has 1400 auctions, but this year there are 2600.
The 925 sales thus far reflect a 63 per cent success rate.
The clearance rate last month was 66 per cent, from the 3410 auctions, making it the busiest month on record since data collection started in 1988. There were an average of 480 auctions on the five Saturdays of last month.
This year's best auction clearance rates were 75 per cent in February and 74 per cent in April, Australian Property Monitors says. The deterioration in Sydney clearance rates has been mirrored in Melbourne, which at the height of its real estate fever were well above 80 per cent most weekends.
But early last month, after the sixth successive interest rate rise, the Melbourne clearance rate fell decisively below 80 per cent. Now it is at an 18-month low of 67 per cent.
Perhaps with the exception of Sydney's inner-west powerhouse market, the auction scene has changed since Easter as record volumes have triggered lower clearance rates and increased buying opportunities.
Listings next month appear to put a halt to the recent selling spree. So far 860 listings are advertised, compared with the 1140 average for July volumes over the past two decades.
An economist with Property Monitors, Matthew Bell, said: ''A combination of winter, as well as a cooling property market, have affected confidence levels of potential buyers over the last few months, and this now seems to be registering with sellers as well.''
There was a strong relationship between falling clearance rates and falling price-growth rates, he said.
The recent annual price growth placed Australia as the fourth fastest growing property market in the world, behind China, Hong Kong and Singapore, according to a survey of 47 countries conducted by the international real estate agency Knight Frank. It was based on the Australian Bureau of Statistics figure of 20 per cent annual price growth, but even the more conservative 12.5 per cent estimate by RP Data would have placed Australia in fifth place. This time last year Australia ranked 34th, after a 6.7 per cent downturn during 2008.
Nick Broadhurst, of Knight Frank Australia, said top-end confidence emerged in February and March, houses and units above $4 million being well received by the market.
''But with this confidence came more stock and when combined with the European troubles and the announcement of Australia's super mining tax, the heat was quickly removed," Mr Broadhurst said.
While transactions were still taking place, it was not at the same pace or same level as earlier in the year, he said.
Dalrye, an 1891 Waverley residence, tested the suburb's top-end strength at auction at the weekend. Its McGrath agents Bethwyn Richards and Matt Lahood were expecting a record $4.3 million-plus. It last sold in 1991, for $900,000, when sold by the merchant banker Mark Burrows.
After it was called onto the market at $4,575,000 on Saturday, three bidders remained.
The auction was a cautious, drawn-out affair - time even for the backyard camellias to fall to the ground - yet it sold after another dozen bids for a healthy $4.76 million.
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