Sydney’s property market is set for one of its quietest auction days this year, with sellers reluctant to offer their homes under the hammer as Australians go to the polls.
Fewer properties will go to auction on Saturday, with 317 homes scheduled for sale on election day, a sharp drop from the 792 the previous week.
Domain chief of research and economics Dr Nicola Powell said the drop in auction numbers was typical for an election day. Sellers and agents tried to be strategic in auction-day selection, particularly in a cooling market, and wanted to avoid days when buyers may be distracted by a long weekend or election.
Auction volumes typically fell between 50 and 70 per cent over the past seven election days, Domain data shows, then rebounded the following week — more than doubling and in some cases tripling. There are currently 948 auctions scheduled for next Saturday.
Proposed policy changes could also affect the decisions of buyers and sellers, Powell said, with some vendors looking to bring forward plans to sell, while others pushed them back.
The largest pullback in auction numbers was in the 2016 election, when Labor first proposed changes to negative gearing tax concessions and the capital gains tax discount if they won. The policy change also went to the 2019 election but was abandoned by Labor ahead of this year’s poll.
While home owners are still cautious about selling on auction day, more are pushing ahead than in previous years. There were only 176 auctions scheduled in 2019, and 191 in 2016.
However, many were expected to sell early or be withdrawn from auction, as has been common recently when auction volumes have been at record heights.
Sydney recorded an auction clearance rate of 57. 1 per cent last Saturday, with about 34 per cent of homes sold prior to auction day, while about 31 per cent of homes were withdrawn from auction – the highest rate since May 2020, as Australia emerged from the first lockdown.
At the past two elections, auction clearance rates held at a similar level to the preceding Saturday but then lifted the following week.
AuctionWorks chief auctioneer Jesse Davidson said election day, and the weeks leading to it, was always a quieter time for the market. Sellers feared buyers would be distracted by the election campaign, while some buyers pulled back due to uncertainty about who would win the election, which policies would go ahead and how they would be affected.
While major housing reforms – like changes to negative gearing and the capital gains tax – were off the table this election, some may want to see which first-home-buyer policies are going ahead before buying or selling.
Davidson had some vendors postpone their auctions when the election was called, not wanting to compete with the distraction of election day. Of the seven auctions that were set to go ahead, most had now sold prior.
However, the drop in homes for sale and lower volume of auctions on election day could work in favour of sellers, Davidson said, as buyers had fewer homes to choose from.
For a clever owner in certain places where the market is bubbling along reasonably well, you’d think, ‘Jeez, if we can put our home on with only 14 other homes, rather than 45 homes, that would be a better result. ’
Among those hoping to sell on election day is downsizer Amy Kim, whose is scheduled for auction on Saturday afternoon.
With talk of a cooling market, she’d rather sell sooner than later. She’s realistic in her price expectations and was not fazed about selling on election day.
People who like my house will come, it doesn’t matter which day [the auction] is on, she said. If they like my house, they will show up.
Her selling agent Jimmy Ji Man Kang, of Belle Property Strathfield, was expecting four young families to compete for the home, which has a price guide of $1. 35 million. They opted for an afternoon auction, leaving interested parties with plenty of time to vote in the morning.
He felt rising interest rates were having more of an impact on buyers than the election.
BresicWhitney chief executive Thomas McGlynn said fewer homes had been hitting the market in the lead-up to the election, with their new listings for the past three weeks down 50 per cent year-on-year.
McGlynn felt the Reserve Bank’s decision to lift interest rates, the first mid-campaign hike since 2007, had heightened the uncertainty buyers and sellers typically felt at election time.
A lot of home owners … have decided to sit on their hands and wait and see who will be elected, he said, but noted that market appraisals had been increasing.
He expected to see a larger increase in homes for sale post-election, regardless of who won, when buyers had more certainty.