Buyers playing catch-up after months of lockdown and anticipating higher borrowing costs purchased almost four in every five homes brought to auction on the second-busiest weekend so far this year.
The east coast-dominated auction market posted a 78.9 per cent preliminary clearance rate in a week that had 3524 scheduled auctions, the most since the 3840 in the week ending March 28, in the run-up to Easter, CoreLogic figures on Sunday showed.
A potent combination of pent-up demand and a wish to lock in a purchase ahead of higher borrowing costs – due to sharply rising inflation – and tighter macroprudential curbs on lending is firing the market. There were 3019 auctions nationally a week earlier.
“I suspect that the combination of expectations of higher rates or higher fixed rates and a wider buffer, which would screen some people out, has caused a rush on activity,” AMP Capital chief economist Shane Oliver told The Australian Financial Review on Sunday.
“But by the same token we would have seen an increase in transactions anyway. The biggest two cities are coming out of lockdowns. A lot of activity in Melbourne was suppressed through lockdown in that state.”
Widespread relaxing of restrictions on auction and home-inspection activity in Melbourne boosted the total as a backlog of owners prevented from showing, or even photographing, their properties got the chance to sell them.
There were enough buyers around, despite the lifting of travel restrictions and an unofficial long weekend for many due to the Melbourne Cup on Tuesday, to push prices higher.
In upmarket Toorak, a three-bedroom semi-detached house with a price guide of $3.4 million – $3.74 million sold for $4.38 million on Saturday. The 36 Canberra Road home sold to a young family buyer, Kay & Burton agent Darren Lewenberg said
“We had nine registered bidders, representing young upwardly mobile families to investors and downsizers,” Mr Lewenberg said.
“In the end it got down to four bidders, with some frenetic, strong bidding when reserve was hit at $4 million.”
In Sydney’s lower north shore suburb of Crows Nest, a four-bedroom home went $220,000 over reserve to sell for $3,720,000 on Saturday. Five bidders competed for the 99 Ernest Street home, said Belle Property Cammeray agent Chris Davies.
“Crows Nest is an area in very high demand with its new metro train station and a great community vibe,” Mr Davies said.
“Buyers from all over Sydney are looking to buy in the area.”
The combined capital city preliminary clearance rate was a step down from the previous week’s 81 per cent. That was lowered to 78.9 per cent, following the usual weekly pattern as more results are included in the mix.
Sydney, with 1144 scheduled auctions, and Melbourne (1739 scheduled) posted their second-highest volumes this year. The initial clearance rate in both cities was below that of a week earlier, with Sydney down to 79.3 per cent compared with 80.8 per cent and Melbourne slipping to 77.4 per cent from 80.1 per cent.
Buyers remained anxious, Melbourne buyer’s agent David Morrell said.
“People are running out of runway before Christmas,” Mr Morrell said. “It’s creating higher prices.”
The smaller auction cities are also booming. Brisbane had the most since 2016 over the week to Saturday. The Queensland capital posted a preliminary clearance rate of 76.8 per cent, based on the reported 198 results of 242 scheduled auctions.
Adelaide, with the highest volume since records began in 2008, returned an initial clearance rate of 86.5 per cent, with 134 of 236 scheduled auctions reported.
Canberra, which had its busiest week since 2018, reported a hefty 90.3 per cent clearance rate, based on the reported 113 results of 140 scheduled.
The action continued on Sunday, when in Melbourne’s south-eastern suburb of Caulfield, a four-bedroom home at 5 Craddock Avenue that had a price guide of $3.5 million to $3.8 million and was called on the market at $3.8 million, sold in a street-side auction for $4.6 million.
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/auctions-surge-as-lockdowns-end-and-fears-of-rate-rises-grow-20211031-p594ow