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The ball isn’t yet back in the buyer’s court, but if this weekend is anything to go by, it’s close to sailing over the net.

On Saturday, almost 1500 homes are expected to go under the hammer – just tiptoeing distance from the all time record of 1558 auctions. This huge number threatens the prospects of sellers. In the past, an imbalance of fewer sellers than buyers ensured competition and strong sales results.

With this equation shifting, buyers will obtain the upper hand.

This auctioning of homes en masse can only mean good things for buyers who have waited on the sidelines, outbid and financially outstripped by others with deeper pockets.

The median house price has surpassed $700,000 – but after 2.8 per cent growth over the quarter, compared to 6 per cent in June, the intensity of autumn is fading.

The Sydney market has also taken a hit – slowing to the lowest levels since March 2014 with the growth run now firmly over.

Domain Group senior economist Andrew Wilson says these figures mean sellers won’t be quite as confident at auction for the rest of 2015.

This selling confidence took a hit last Saturday, with auctions recording the lowest clearance rate for the year, at 73 per cent.

If this continues to drop, as sellers look to finalise a sale before Christmas, buyers will claw back even more power to negotiate, Dr Wilson says.

This year, even Melbourne Cup Day is expected to host a relatively large number of auctions – more than 500, compared with a usual figure of about 150.

It’s unlikely Melburnians have suddenly turned against the biggest horse racing day on the calendar – in fact, Dr Wilson says it could be that ‘agents are strategising [to sell] on a weekend that isn’t a Super Saturday to avoid the competition’.

Despite this, he said home owners and sellers shouldn’t expect any drops in prices. Melbourne is expected to be the most resilient capital for future price growth, he said.

On Wednesday, Century 21 Australasia chairman Charles Tarbey told Domain that some agents had advised sellers to wait until spring, commonly described as the ‘selling season’, to list their properties.

He questioned the veracity of that advice, saying the market hadn’t been seasonal for years. Since the boom began, the market has failed to be driven by the usual fluctuations seen through the year, instead changed largely by the snowball effect of a Fear Of Missing Out (FOMO) and falling interest rates.

Yet it has been rate hikes dominating headlines recently, with Westpac and Commonwealth Bank’s interest rate increases being blamed for damaging market confidence and the auction clearance rate.

Astute buyers, who can see that smaller tier lenders have actually been lowering their rates, are the winners of this negativity – able to purchase when others are scared off by the unpredictability of the lenders.

With more than a month left in spring, it seems we might soon need to be renaming it the ‘buying season’.

Research house BIS Shrapnel senior manager Angie Zigomanis said buyers would have the chance to approach auctions at their leisure as the high-stress auctions of autumn faded.

‘It won’t be the case that [seemingly] every time you miss at auction the next weekend will be more expensive,’ he said.

Buyers may also be assisted by increasing levels of supply and, while investors are being bitten by APRA changes, home buyers are predominantly not, AMP Capital chief economist Shane Oliver said.

‘Melbourne is in a similar cycle to Sydney but some buyers are better off with prices relatively lower in Melbourne,’ Dr Oliver said.

The frantic pace of the market that saw some buyers bidding beyond expectations, and in some cases beyond sense, is clearly wearing off.

Depending on the result this weekend, we’ll clearly see whether the ball is about to be given one final, decisive hit back to the buyer.


Posted by Jennifer Duke – Domain (Fairfax) on 22nd October, 2015