Auction Action: Under pressure but holding the line

Another weekend with less than 500 auctions scheduled in Sydney, but as it is the last weekend of school holidays and a long weekend, ‘seasonal’ excuses are readily available for those who are not inclined to blame a sluggish 2016 market on one or more of the following:

  • Malcolm Turnbull and Scott Morrison – Outstanding comedy performance in a leading economic role.
  • Scott Morrison – running “spooky” the end of the property world is nigh campaigns every other week in a tag team with land bankers and others determined to keep the household debt and asset price ponzi alive with all manner of RBA, APRA and government policy support and sustenance.
  • The Australian Banking brotherhood threatening economic ruin and going all Travis Bickle ….”Are you looking at me? Are you looking at me?”… at the suggestion that they may warrant a Banking Royal
  • Robert Gottliebsen’s conviction that APRA has a white fluffy cat on their laps and are carelessly yanking macro-prudential levers to cause a massive credit crunch for the apartment developer sector (also proud owners of white fluffy cats on laps)
  • China slamming the capital outflow window shut on a bunch of tigers and flies who have been seeking to relocate some booty down under.
  • Bill Shorten’s negative gearing and capital gains tax reforms
  • The confidence fairy – A particularly vicious and fickle character who can turn nasty in an instant and must be pandered to on an ongoing basis.

But regardless of the brand of tea leaves you prefer the Sydney Market is still looking pretty solid.

A median price of $1,100,000 is nothing to be sneezed at as it is still $250,000 higher than the median in 2013 – which is when APRA and the RBA starts spraying lighter fuel on the market as they panicked when it dawned on them that the mining boom wasn’t going to run for decades as had been predicted by Ken Henry and a gaggle of beer goggle futurists.

Plus total sales for Saturday were about $240 million and that should generate about $5M in juicy fees for eager agents (assuming a 2% commission) with Audi lease repayments to cover. Though whether the shareholders in the recent McGrath float will see as much of that as they would like is another question.

As a special treat we have now added the estimated agents commission each week to help readers understand the very real “pain” that results from a slow market with few listings. This week last year was a horror show with only $300K in fees but 19 March 2016 (911 scheduled auctions) produced a bountiful crop of over $10M in commissions – Woo Hoo !

The Sydney Morning Herald and Australian Property Monitors report indicates that agents reported 77% of the 426 auctions listed for Saturday – which is about average.

160423 - Snapshot

Note:   In order to encourage agents to help APM collate the most complete stats each Saturday night, the Glass Pyramid is presenting all results as a percentage of the number of Auctions Listed.  The reason for this is that agents are more likely to report ‘good results’ sooner and that can tilt the figures when results are presented as a % of what agents have bothered to report on Saturday afternoon.

Anyhow – onto the good stuff!

There are THREE tables this week.  The first contains yesterday’s APM’s  results pdf sliced and diced.  The second contains a summary of recent weeks and the third contains the data and averages for the first 13 weeks of Auction Action fun.

A few comments on yesterday:

  • 426 auctions were scheduled
  • Clearance rate – 50% of scheduled auctions were cleared with 71% clearance of the results actually reported
  • The median dropped to $1,100,000 –but still up over $250,000 on 2013 (Note:  The rocket fuel from APRA and the RBA really started to kick in about this time in 2013 as the gap between 2016 and 2013 has been narrowly very quickly over the last few weeks).
  • Pre-Action Panic – plummeted to 24% this week.
  • Hammer Time – Hammer Time  rose to 30% .
  • Seller Sadness – held steady at 11%. 

Each week publishes auctions results (click here) compiled by the good folk at Core Logic RP .  The difference between these results and the SMH/APM results is that they include all auctions during the week, whereas the SMH/APM results are for auctions listed just on the Saturday.  This means that the number of scheduled auctions is usually higher.

Click on the link to read all the details in their natural habitat but the key “Auction Action” metrics are:

  • No of Sched Auctions:      626 versus 426 on SMH/APM
  • % of results rep:                 80% (500 of 626) (77% last week)
  • Number cleared:                 392
  • Clearance as % of rep:      78%   (69% last week)
  • Clearance as % of sched:  63%   (53% last week)
  • Pre-Action Panic:               18% (114) of the sched auctions (21% last week)
  • Hammer Time:                    48% (302) of the sched auctions (38% last week)
  • Seller Sadness:                     13% (84) of the sched auctions (19% last week)
  • The metrics are reasonably consistent with the SMP/APM results having regard to the differences in reporting rates.
  • The reporting rates for the Core Logic rates varies a lot each week and that affects the figures when expressed as a % of the scheduled number of auctions.

Table 1 – Saturday 23 April 2016


Table 2 – Summary of recent results.

160423 - Summary

Table – Summary of the first 13 weeks of Auction Action

160423 - 1st Quarter Summary

Categories: Macrobusiness

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