SYDNEY’S property buyer numbers plunged over the weekend, causing the auction clearance rate to fall to 77.8 per cent, just above the national average of 77 per cent.
The poor return from one of the busiest auction weekends in winter history saw the Harbour City slump to fifth place among the nation’s capitals, despite holding down top position for nearly every weekend of the past two years.
Of the major capitals, Adelaide had the best clearance rate at 81.4 per cent, followed by Canberra’s 81.1 per cent. Melbourne also beat Sydney, with 78.9 per cent.
Auctioneers are warning vendors to set a realistic price or risk disappointment, with buyers more educated on what represents fair value.
Rocky Bartolotto from Auction Services said the number of buyers per property had fallen considerably in recent months with 40 per cent of the weekend’s auctions attracting less than five registered bidders; in some cases less than three.
“Vendors need to consider this when final discussions are made with regard to setting the reserve price,” Mr Bartolotto said. “A clear message from auctions this week is that lower buyer numbers equates to less competition, which will determine final selling prices.”
Mr Bartolotto’s company had a clearance rate of just 70 per cent and that unrealistic vendor expectations were not helping.
“Vendors hoping to achieve a dream price can expect an unfavourable result,” he said. “One case in particular stood out this weekend with a reserve price set at $500,000 over any comparable sales, above the agent’s estimated selling range and nowhere near in line with buyer feedback during its campaign. No result was achieved, with the bidding stopping well below the optimistic price point.”
Picnic Point in the Bankstown region had one great result, when a brick home at 54 Apex Ave sold for $1.241 million in front of a 150-strong crowd. Seven of eight registered bidders entered the fray, pushing the result to $191,000 above reserve.
The buyer was a young couple, enjoying some back up from parents and the agent was Darren Musgrave from One Agency Real Estate.
A Waverton townhouse fetched $155,000 more than its reserve after 10 of the 17 registered bidders fought it out.
The modern, three-bedroom property at 5/1 Tunks St, which has two bathrooms and city skyline vistas, attracted an opening bid of $1.4 million and climbed in varying increments until the hammer fell at $1.725 million.
“This result is an indication that the market is still performing strongly through the winter months on the lower north shore,” selling agent Tom Scarpignato said. “Townhouses remain very popular for upsizers and downsizers alike.”
A renovated Federation home at 12 Bobbin Head Rd, Pymble, was snapped up at auction for $3.05 million.
The five-bedroom house, which had a price guide of more than $2.65 million, attracted four registered bidders. While the auction wasn’t planned to fall on 8/8, selling agent Philip Waller from McGrath Lindfield said there was strong interest from overseas buyers, local Chinese buyers and residents.
“The lower Australian dollar, favourable visa conditions and low interest rates have created ideal conditions for buyers,” Mr Waller said.
The house was inspected by 81 groups during the campaign and had 17 contract requests.
Maroubra proved to be a hot spot this past week as properties throughout the suburb were snatched up at and prior to auction, with two-bedroom units drawing strong interest from buyers.
At 3/30 Bona Vista Ave, a two-bedroom unit sold for $1.11 million, $110,000 above the reserve. The beachside property sold via Belle Property Randwick’s Shane Vincent to a buyer from Bondi.
According to CoreLogic RP Data, the median house price for Maroubra is $1.48 million while the median unit price is $729,500.
Mr Vincent said the strong interest in two-bedroom units came from a mix of buyers.
“With interest rates low we’re finding a lot of tenants are looking to enter the market place and pre-approved investors are making last minute purchases,” he said.
“Banks are now changing the rules — requiring investors to have larger deposits. These new rules are designed by APRA to try and soften the market.”
Redfern continues to perform strongly as shown in the sale of a four-bedroom house on a large block for $3.45 million.
The renovated home at 27 Chelsea St, had last changed hands for $2.58 million in June 2013, bringing just under a million return in a year.
Houses are strong performers in the inner-city suburb of Redfern, which has seen a rise in house prices of 17.3 per cent in the past 12 months, with the median house price now $1.15 million.
The property was listed with Ben Collier of McGrath Edgecliff and Shannan Whitney of Bresic Whitney Darlinghurst.
- Daily Telegraph