The growing divide between Sydney’s richer and poorer suburbs

Sydney’s auction market has split in two this year, with a clear divide emerging between Sydney’s richer suburbs and their less well-off counterparts.

This time last year clearance rates were consistently high across the city, but this year lower-priced property in the west and south-west is struggling to find buyers.

Domain Group figures show the number of properties put to auction is 20 per cent down on last year. The most houses put to auction were in the upmarket suburb of Mosman (49) and the most units offered were in Randwick (51).

In terms of success under the hammer regionally, the lower north shore top-scored with a boom-like 81.4 per cent clearance rate. But the city and east (78.9 per cent), northern beaches (77.3 per cent) and upper north shore (70.3 per cent) weren’t far behind.

 

Redfern (13), Kingsford (13) and Alexandria (10) all achieved 100 per cent clearance rates for houses. For apartments, Narrabeen on the northern beaches also achieved a 100 per cent clearance rate, from 12 sales.

But it’s a different picture elsewhere. Whereas last March clearance rates in the west were 75.8 per cent, this year less than half the number of homes put to auction found a buyer (49.4 per cent).

“We’re seeing a market of haves and have-nots,” the Domain Group chief economist, Dr Andrew Wilson, said.

In Auburn, 25 properties were listed for auction, but just 34.8 per cent found a buyer.

1459489734502Shane Thamrin with his girlfriend Stephanie Sebalj, are selling their property in Auburn. Photo: Wolter Peeters

The owner of a three-bedroom house at 14 Hillview Street, Auburn, Shane Thamrian, thinks the property is good value, yet it failed to attract a single bid at its March 19 auction despite its $730,000 reserve. It’s now listed for $725,000. “There’s a bit of new interest,” he says.

“I’m a bit puzzled at why it hasn’t sold at that price … I had it on the market towards the end of last year at $810,000, which was probably a bit high, but I’ve dropped it by a good $80,000 now, so it should sell.”

The director of Starr Partners, Auburn, Greg Okladnikov, is also confident of a sale. “The buyers who are looking now think it’s fairly priced,” he said.

 

But he says whereas auction clearance rates have dropped, most homes are selling later by private treaty once vendors adjust their prices. “Last year it took about about three to four weeks, now it’s four to six weeks.”

Dr Wilson thinks one of the reasons for the west’s auction weakness compared with last year is due to the investors who were so prominent in the lower-priced markets now being unable to secure loans due to tougher lending requirements.

In the west over the March quarter, Guildford (16 listings) had a clearance rate of just 33.3 per cent and Greystanes was 25 per cent (eight listings). In the south-west, Cecil Hills was 16.7 per cent (six listings) and Edensor Park was 36.4 per cent (11 listings).

Dr Wilson says the reason for the continuing strength in more exclusive areas is due to people with higher incomes benefiting from the strong Sydney economy and also to those parts looking to be good value. “They haven’t had the same level of price growth as outer suburbs in the past year,” he said.