Sydney has seen its weakest start to the property auction market spring season in five years as the Harbour City continues to feel the bite of rising interest rates, especially for investors.
Domain reports a preliminary clearance rate of just over 67% for Sydney, its lowest rate for the first spring weekend since 2012 and the third consecutive decline in weekend rates.
Auction volumes were also lower in Sydney, down to 649 listed auctions from 674 the previous week.
Melbourne's auction market meanwhile is proving more resilient, with the Victorian capital posting a preliminary clearance rate of 74.8% from 841 listed auctions, according to Domain.
The auction results come hot on the heels of the latest analysis from CoreLogic that found a slowdown in value growth for the Sydney house market while Melbourne's remains steady. CoreLogic's head of research, Tim Lawless, attributed the Sydney slowdown in part to "affordability constraints and tighter lending conditions", especially to property investors feeling the pinch of "higher mortgage rates for investment and interest-only mortgages".
It should be remembered that any slowdown in Sydney is from a supercharged rate of growth over the past few years – and the city continues to post plenty of properties selling for thousands, if not hundreds of thousands, above reserve. At the same time, auction sales below $500,000 are becoming increasingly rare across the greater metropolitan area.
In North Sydney, a modest 3br freestanding cottage sold for $100,000 above reserve at $2.6m. The property last sold in 2010 for $1.742m, earning the vendor almost 50% in resale value over seven years.
Sydney's auction median price was $1,271,500 last week according to Domain, up on the previous week's $1.2m. No property sold at auction for this price, but in Roselands, a 4br, 733sqm house with double lock-up garage fetched $1.253m.
At the top end of town, a 5br, 1416sqm Strathfield deceased estate sold for $5.5m. It was the first time the house had been on the market in 88 years.
A few Sydney properties passed in at auction below $500,000, including a 2br, 127sqm unit with parking in Chipping Norton. The most affordable disclosed sale was a renovated 2br Harris Park unit with lock-up garage plus additional car space that sold prior to auction for $541,000.
In South Yarra, a family paid $500,000 above reserve to secure a 4br terrace they themselves had sold six years ago. The 888sqm Victorian with pool sold under the hammer for $7.015m, the most expensive disclosed auction sale for the week.
Affordable options continue to be far more readily available in Melbourne than Sydney. A 1br Brunswick East unit with parking sold prior to auction for $320,000.
Domain reports Melbourne's median auction price was $850,000, down slightly on the $880,000 posted the week before. In Derrimut in the city's west, a 4br, 888sqm house with a four-car lock-up garage sold for this price.