Sydney property market slides, M

This weekend’s weaker auction results pointed to further price falls in Sydney and the start of a possible downturn in Melbourne.

CoreLogic preliminary figures show a 62.4 per cent clearance rate in Sydney on a big weekend of over 1100 auctions, down from last week’s preliminary figure of 66.2 per cent when there 1200 auctions.

AMP Capital chief economist Shane Oliver said the final clearance figure for Sydney was likely to be around 54 per cent which would mean six weeks of clearance rates ‘‘in the fifties’’.

‘‘[This] points to ongoing price weakness,’’ Dr Oliver said. He said auction clearance rates in the mid-50s pointed to price declines on the back of the experience in 2008 and 2012.

‘‘Our view remains that average residential property prices in Sydney and, with a lag, Melbourne will fall 5-10 per cent into 2019,’’ Dr Oliver said.

Sydney house prices fell 0.7 per cent in November to be down 1.3 per cent over the past three months, but rose by 0.5 per cent in Melbourne to be up 1.9 per cent over the quarter, according to CoreLogic.

In rain-swept Melbourne, where there were more than 1600 auctions scheduled, the preliminary clearance rate fell to 66 per cent from 69 per cent last week. CoreLogic said Melbourne’s revised auction clearance rate could surpass last week as the lowest seen since June 2016.

Dr Oliver said Melbourne was ‘‘following Sydney down’’.

Independent economist Saul Eslake said it was still too early to say if the housing market was in a confirmed downturn, but that the bull run in Sydney and Melbourne was certainly over and had been so for a few months.

While the broader market was weaker, there was still plenty of evidence this weekend of strong demand for well-located Sydney properties offering development potential.

In Sydney, developers fought it out for a former housing commission home at 17 Woodward Street in Ermington, in the north-west, which sold for $1.57 million, well above the reserve of $1.46 million.

In Roseberry in the eastern suburbs, an unliveable, fire-damaged home at 25 Wellington Street sold for $1.516 million with four bidders while in Sydney, a three-bedroom 1920s home on Hastings Parade with spectacular views over Bondi Beach sold for $7.55 million.

In Melbourne, Brett Melzer and Khin Omar Win, who operate Myanmar hot air balloon company Balloons over Bagan, sold their three-bedroom Toorak home for $4.6 million having paid $3.53 million three years ago.

Nationally, the CoreLogic preliminary clearance rate was 63.5 per cent from 3200 auctions, lower than last weekend’s 66.9 per cent (revised down to 61.1 per cent) and much lower than the 72.3 per cent recorded for the same time last year.

In the smaller auction markets, Canberra recorded the highest preliminary clearance rate of 75.6 per cent according to CoreLogic with just over 100 auctions scheduled up from a final figure of 62 per cent last weekend.

Adelaide managed a preliminary clearance rate of 64.6 per cent from 141 auctions, but this will likely be revised lower than last weekend’s final figure of 63.4 per cent.

Brisbane recorded a preliminary clearance rate of 44.9 per cent from 191 auctions, down from 52.1 per cent last week when there were 153 auctions.The Gold Coast was host to 65 auctions this week and only 32.4 per cent sold.

Perth, which managed a small (0.2 per cent) but significant rise in house prices in November suggesting the market may have finally bottomed out, reported a higher clearance rate of 47.6 per from 50 auctions up from 33.3 per cent last week.

Key points

Sydney hits six weeks of clearance rates ‘‘in the fifties’’.

Melbourne’s rate could surpass last week as the lowest seen since June 2016.