As Sydney auction market hits a historic low with clearance rate going below 60 percent on Saturday, Nov. 7, analysts warn that it could drop further before Christmas.

For the first time in three years, the auction clearance rate touched 59.2 percent, which is way below than the 64.4 percent that was recorded last weekend. With 1011 houses being listed for auctions, some auctioneers reported that not a single buyer turned up.

While noting that the market has crashed without early signs of recovering, “parts of Sydney are now clearly buyers’ markets, so if you’ve sold and you’re a buyer, that’s pretty good,” Domain Group senior economist Dr Andrew Wilson said, Domain reports. "This has been a very sharp decline; we are not seeing an orderly correction phase. But we still have around 6000 auctions to come in Sydney before the end of the year,” he added, according to Financial Review.

With lenders' increasing rates across the nation, Wilson believes that it has contributed to buyers’ skepticism, but lenders blame it on regulatory rules and market conditions. Wilson added that the surge in the interest rate scared buyers away, which reflect the impact the market has on them.

However, auctioneer Will Hampson of My Auctioneer reported good auctions despite an all-time low clearance rate. He sold seven properties out of his nine scheduled auctions.

Due to a gradual decrease in the capital growth, the number of buyers are reportedly fading away. “After four years of growth the sentiment is that the market has capped out,” he said.

Comparatively, Melbourne recorded a better auction with rates touching 70 percent, much higher than the 66 percent that was recorded last weekend. As many as 864 properties were sold. Saturday’s auctions in Melbourne reflected a “normal” market in which buyers and vendors were more finely balanced, reports the Domain group.

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