Auction volumes picked up for a second week across Australia’s east coast-dominated residential property market and the proportion of homes sold hit a 12-week-high, signalling the important spring selling season has begun.
A 23 per cent week-on-week increase lifted Melbourne’s scheduled number of auctions to 787 and Sydney’s total rose 6.3 per cent to 654, lifting the national weekly total to 1839 from 1611, CoreLogic figures on Sunday showed.
The preliminary combined capital city clearance rate of 62.6 per cent was the highest in 12 weeks, in a market where agents said buyers were willing to compete for unique or high-quality properties.
In Bayside Melbourne’s Black Rock, an opulent beach-front, five-bedroom home with a blue bath and gold tapware that was marketed with a $3.85-$4.15 million price guide was called on the market at $4.5 million and sold for $4.6 million on Saturday.
“It’s pretty over the top, but a lot of people like that type of look,” said Marshall White agent Oliver Bruce, who marketed the 344 Beach Road home on 966 square metres.
Fast-rising borrowing costs that have been dampening demand and pushing moderately priced homes lower were not troubling buyers of prestige property, Mr Bruce said.
“We haven’t seen that effect at the premium end,” he said.
The diverging nature of the housing market was clear last week when developer Stockland, the largest seller of greenfield land lots, sold principally to middle-income earners, said it was making provision for a default rate of up to 10 per cent by the June quarter of next year.
Two days earlier private developer Beulah, the company behind the $2.7 billion Sth Bnk twin skyscraper project, Australia’s tallest apartment development, said it had sold a further $200 million-worth of units, principally to downsizers and people seeking larger apartments.
Economist and managing director of consultancy SQM Research Louis Christopher said scheduled auctions were now rising as the spring market picked up, but the rates of successful sales would depend on how much the Reserve Bank of Australia further raised its benchmark lending rate. The official cash rate target has been lifted from 0.1 per cent to 1.85 per cent since May.
“If we do see another 150 basis points from here, then I will be more bearish. But if it’s only got another 50 in it and they go on pause, that will be interesting,” Mr Christopher said on Sunday.
“Property historically has been a good hedge against inflation. At 50 basis points above where we are now, then we still have a situation where we’ve got real negative interest rates out there. It’s generally stimulatory towards the housing market when we see that.”
In Melbourne, buyers’ agent Emma Bloom said buyers were putting a premium on properties they could move into without having to renovate or redevelop, given the high costs of materials and delay in getting work done.
“There’s a premium on move-in-ability. It’s a huge attraction to people at the moment,” Ms Bloom said.
This was also affecting decisions around land sales, she said.
“There are permits, there are costs, supply chain [issues],” Ms Bloom said.
“You would almost not advise vendors to put land on the market at the moment. People are not grabbing land opportunities like they were.”
In inner-eastern Sydney’s Drummoyne a four-bedroom house on 960 square metres of land that last sold for $4 million in 2010 went under the hammer for $10,920,000, having been called on the market over the $10 million mark.
The 348 Victoria Place house sold to a buyer who had only viewed it for the first time on Saturday morning before the auction.
There was strong competition among family buyers for the inner-west waterfront home featuring a jetty, boat shed and slipway, said Ward Partners director Matthew Ward.
“There’s a strong part of the market that doesn’t want to cross the Gladesville Bridge for various reasons. All of my buyers were keen to be this side of the bridge rather than on the north side,” Mr Ward said.
Of the smaller cities, Brisbane had the largest number of scheduled auctions with 151 and a preliminary clearance rate of 44.2 per cent. Adelaide, with 125 scheduled, reported an initial figure of 68.1 per cent, and Canberra had 103 auctions and a preliminary clearance rate of 66.7 per cent.
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/auction-clearances-hit-12-week-high-ahead-of-spring-selling-bump-20220821-p5bbi9