Sydney's spring rush of real estate listings is handing greater choice and more negotiating power to buyers of mid-market family homes, especially in the $1 million to $2 million price bracket.
But market observers say most higher-priced properties in gentrified areas are outperforming the well-supplied family home market in the middle-ring and outer suburbs.
Real Estate Institute of NSW president John Cunningham said there had been a substantial increase in listings in the family home market segment in the past two months.
He warned that buyers shouldn't generalise about the state of the market, for despite a 20 per cent spike in spring listings compared to last year's market, plenty of places in the city were experiencing very strong bidder activity at auctions.
"The more gentrified or trendier areas are still high in demand and low in supply, but the family home market has now been supplied with a lot more stock," Mr Cunningham said. "That area of the market is certainly taking a hit: properties are still selling, but it is not getting the level of competition that it used to, so vendors who want to sell have to accept that the market of today is not the market of yesterday."
At the weekend, the Domain Group reported an auction clearance rate of 62.4 per cent from 442 reported auction results.
A year ago the market was markedly more upbeat. Clearance rates were above 73 per cent and agents were promptly reporting results for 80 per cent of all scheduled auctions. Currently, agents are failing to report about 35 per cent of auction results in a timely fashion, which is a pointer to a high pass-in rate at auctions.
Auctions are a popular way to sell property in the inner suburbs as these areas have scarcer real estate and typically attract many more buyers than sellers. This situation is reversed in the outer suburbs where there can be just one or two buyers for every three or four available properties.
The weekend market saw some strong results in the inner west and eastern suburbs.
In Newtown, a four-bedroom/four-bathroom contemporary home at 34A Baltic Street shot past its $2 million guide price to sell under the hammer for $2,163,000. The opening bid was $1.9 million.
Ray White Surry Hills and Alexandra director Shaun Stoker said two of the three pre-registered bidders competed for the property, which has a shared gated driveway and is on a 216-square-metre block with a Torrens title.
"There have only been two $2 million-plus sales in Newtown in the past eight weeks and the last one was on 450 square metres," he said.
He said good properties sold well in any market but current inquiry rates and selling conditions pointed to a market correction.
Mr Stoker noted that open for inspections in inner areas were attracting between eight and 15 groups. This was down from the 30 to 40 groups inspecting properties at the height of Sydney's recent boom market when agents were also receiving hundreds of emails each week from prospective buyers asking about current and upcoming listings.
"The numbers have dropped, but there are definitely buyers who are out and about," Mr Stoker said.
The point was proved in other parts of the inner-west when a deceased estate at 26 Francis Street, Marrickville, sold through Harris Tripp for $2.63 million - well above the reserve. The Agency Inner West secured $1.76 million for a single-fronter at 121 The Boulevarde, Dulwich Hill, which had a guide price of around $1.5 million.
The most expensive property reported sold at auction on Saturday was a double-block property on 412 square metres at 59 Harris Street and 14 Sutherland Avenue in Paddington. Offered for the first time in 60 years, the large-for-the-area property with two existing dwellings offered considerable redevelopment potential. It fetched $5.16 million through Ballard Property.
Some agents claim the $4 million-plus market is in better shape than the $2 million to $4 million segment. Certainly, Phillips Pantzer Donnelley found a buyer at $4.5 million for an art-deco, five-bedroom house at 68 Beach Street, Coogee, while McGrath Avalon sold a home at 238 Hudson Parade, Clareville, for $4.4 million.
Nearly one in four auction properties were passed in on Saturday. They included a three-bedroom house at 121 Waratah Street, Haberfield.
Selling agent Matthew Nolan, from Rich & Oliva Croydon Park, said the listing attracted several genuine bids but the auction stopped once a $1.7 million vendor bid was posted.
"We still have interest from one of the parties that were there, but it's more than likely the property will be relisted for private treaty sale on Monday," he said.
According to Mr Nolan, many mid-market buyers are viewing the market "at a different level" to some vendors' price expectations.
"We find that homes in the $1 million to $2 million range are performing well," he said. "Once you go above that, you go into a more limited market. I think people are a bit more cautious than they used to be - it is a normal real estate market now.
"I talk to a lot of real estate agent mates from all over Sydney. We all say: the days are gone where you can open the door and properties will sell for way above expectations without the agent doing any work. As an agent, you have to do your client follow-ups and do the work to get the people there. That is a normal market."