Last month one in six sellers got cold feet and called off their auction – almost twice the rate of apprehensive homeowners during the same time last year.
It’s the most deflated homeowners have been in at least three years.
Clearance rates have also been in decline over the year, with just over half of homes selling at auction in November – the lowest in two years, excluding January, which normally has a low volume of sales.
It was 73 per cent during the same period last year, according to Domain Group data.
AMP Capital chief economist Shane Oliver said buyers no longer had a “fear of missing out”, which had been a big driver of the auction market.
“I think the sentiment around the property market is a lot weaker than it was two years ago,” AMP Capital chief economist Shane Oliver said.
“Buyers can afford to take their time, they can be more considered about what they’re buying.”
Mr Oliver said low clearance rates also showed that APRA measures to slow the investor market were “starting to bite”.
The poorest performer of all the Sydney regions was the city’s west where just 48 per cent of homes sold at auction across November. The strongest market was across town on the lower north shore with a clearance rate of just 62 per cent. The northern beaches reported clearance rates at 60 per cent.
Auctioneer Damien Cooley said the boom conditions the Sydney market has experienced for the past five years have led to buyer fatigue.
“The market is really taking a breather on the boom we’ve been through, a lot more properties have been on market throughout spring, and we’re seeing genuine supply and demand factors.”
Mr Cooley said the high number of properties withdrawn before auction was due to an expectation in the market that conditions would improve in 2018.
“Some vendors are prepared to take the risk that the market will be better in the new year, and they’re happy to take their property off the market.”
But not all Sydney homeowners are feeling deflated.
Raphael Reponty, who is selling in one of the regions still seeing the strongest demand in Sydney, is confident ahead of the auction of her North Manly home next Saturday.
She is selling her four-bedroom house to move to Byron Bay, and believes that the lifestyle of the northern beaches will attract plenty of bidders to the auction.
“When I came to the house I fell in love with the open space, the privacy and the entertaining areas,” said Ms Reponty. “We just need to find the right family who will enjoy the house as much as we do.”
Casey Faets, of Clarke & Humel Property, who is selling Ms Reponty’s home, said buyers were being pickier as more homes were coming on the market. But he said homes at the higher end of the market, as well as completely unrenovated projects, were still achieving good results.
“Particularly at the lower end of the northern beaches, buyers have more to choose from, which is one of the main reason auction clearance rate dropped a little bit,” he said.
“But conditions are still strong in this area because of the lifestyle it offers,” he said, citing the proximity to beaches and the CBD as the main selling factors.
“We’ve got in total six contracts out, so it’s proven to be one of the more sought-after properties.”
Mr Oliver predicted sustained low clearance rates would spark a drop in property prices by around 5 per cent over the next year.
And Mr Cooley agreed: “It depends on how much property comes on the market, if we see a lot, there’s a genuine chance we’ll see a price correction of a minimal amount.
“The first quarter will tell us a lot. People will be watching the market to see how it performs.
“The one factor that will continue to hold up our market is the fact that we have incredibly low interest rates.”