Real estate guru Tom Panos says the auction market has collapsed to its lowest level in 35 years after a “beautiful” Sydney home failed to attract a single bid.
In a video shared to social media on Sunday, The Block auctioneer, who provides regular updates about the auction market, said he had not experienced such low levels of interest since the recession in 1991.
Mr Panos was touring a five-bedroom property in Merrylands, Sydney, with a guide of $2.8 – $2.85 million, when he unleashed on the state of the market.
“I’ve been auctioning property for 30 years and I’ve been in real estate for nearly 40 years,” he said.
“Through the early 90s, the recession, then we have GFC (Great Financial Crisis), then Covid, and every correction inbetween… This is a beautiful house, gorgeous house. And I’m telling you today again, zero registrations.
“This is the lowest level of auction activity I’ve experienced myself. I think this is the lowest since 1991.”
He said during the recession in the early 1990s he still had two or three auctions scheduled in a day, but on Sunday he had only one on the books.
It was the second week in a row where a property he was auctioning had received zero registered bidders, he said.
“Here we are again; second week, no regos. Nothing’s going to sell.”
It comes as Australia’s annual headline inflation figure came in better than expected at 3.9 per cent, which he claimed meant it was unlikely there would be a rate rise in August.
“Normally, that sort of news gives some sort of confidence. Not this time. Nah man,” he said.
“People are just clocked out. To me, this tells us something big is going on. Buyers aren’t just worried about interest rates. They’re worried about confidence. They’re worried about policy. They’re worried about making a decision.
“Markets don’t collapse overnight. They freeze [and] they’ve frozen.”
He added: “If you’re in real estate, don’t ignore these signals. And if you’re a seller or a buyer, understand, confidence is such a big thing.
“It’s amazing. When prices are crazy, bidders are bidding crazy. When there’s bargains, they’re not buying.”
This weekend’s market figures by analytics firm Cotality found the preliminary auction clearance rate ratcheted 1.1 percentage points higher this week, reaching 53.6 per cent, continuing a trend of improvement from the June low when the early clearance rate fell to 47.4 per cent.
This was the highest preliminary clearance rate in three weeks, but the tenth week in a row where it has held below 55 per cent.
According to Cotality, 407 auctions were held in Sydney this week, 4.5 per cent lower than a week ago and 28.7 per cent lower than last year.
Meanwhile, Melbourne continued to record a stronger preliminary clearance rate relative to Sydney, with 59.6 per cent of Melbourne auctions reporting a successful result so far compared with 49.7 per cent of Sydney auctions.
This was backed by housing commentator Tarric Brooker who said the sold to listed auction rate in Sydney received a slight bounce from near all time lows, while Melbourne falls back to within 1 per cent of its recent cycle low.
He said the real test of each city’s auction markets will come in the spring when auction volumes push higher on seasonality.
“I suspect we will have a significantly greater amount of stock sitting on market,” Mr Brooker said.
Earlier this week, Mr Panos said the story of two hardworking nurses scrambling to make ends meet after buying a new house, while unable to sell their previous home, showed Australian property market was “battered”.
He said their story represented the “domino effect in our economy” brought about by falling prices and buyer confidence, warning those celebrating the downturn of several “unintended consequences”.
In a week in which his passionate and viral take on the housing market as being the worst in decades saw him mocked in some quarters, Mr Panos told news.com.au he understood the support for falling prices but said people should be aware of unwanted side effects.
He shared the case of two married nurses who bought a $2 million property this year, but were now in “survival mode” and paying off two mortgages as they battled to sell their old home despite dropping the asking price by 20 per cent.
“I am in a mess now because of this budget,” one of them told Mr Panos in a message.
“I am not a greedy investor. Me and (my) wife are hardworking nurses. Really struggling.
“I bought (a) new one without selling. That was my mistake. I expected it to be bad. But I did not expect that market will be dead.”
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