As the traditional spring selling season picks up steam, home buyers are bidding over reserves and clearance rates are holding firm, with all signs pointing to a gently rising market.
After the disruption of football finals in Sydney and Melbourne last week, auction volumes have surged back, more than doubling to 2,436 across capital city markets, according to CoreLogic. Despite the bounce in supply, buyer demand has held up, with a preliminary clearance rate of 71 per cent nationally, compared to 70.3 per cent a week earlier.
Sydney’s success rate was 69.7 per cent, just down on the 71.7 per cent achieved a week early, while Melbourne hit 72.7 per cent, lifting from 66 per cent, according to CoreLogic’s preliminary tally.
Joseph Luppino auctions 91 Chirnside Street, Kingsville, in Melbourne on Saturday. Luis Ascui
Along the east coast, buyer appetite showed up strongly at auction. A four-bedroom house in South Yarra in Melbourne’s inner east sold $750,000 over reserve on Saturday as well-heeled cash buyers competed for the scarce number of high-quality properties on the market, auctioneer Greg Hocking said.
The 42 Davis Street home, listed with Castran Gilbert, stands on a 499-square-metre block. With a price guide of $4.25-$4.65 million and a reserve of $4.5 million, it sold for $5.25 million. The auction pitted two buyers who were prepared to pay over the odds, Mr Hocking said.
“They’re buying long term,” he told The Australian Financial Review. “They’ve got the capacity to buy. They’re not borrowing.”
The auction reflected a big jump in price on the neighbouring 40 Davis Street, a similar four-bedroom home on a 502sq m-sized block that sold for $4.6m in March, Mr Hocking said.
At Burwood in Sydney’s inner west, the three-bedroom home at 75 Oxford Street was sold at auction for $2.3 million, comfortably exceeding its reserve of $1.75 million. Listed with The Agency’s Andrew Kazzi and Steve Devine, its initial price guide was $1.5 million.
The action was just as brisk in Brisbane, where in outer suburban Eight Mile Plains, a five-bedroom home was knocked down at auction for $1.651 million, setting a record for that suburb.
The house at 43 Ingluna Court sold for $231,000 over its reserve.
“The sellers are ecstatic, only needing $1.4 million for the next property purchase, they needed to hit a certain price point and the auction worked well in their favour,” Ray White Sunnybank Hills selling agent George Yang said.
“Being such a sought-after neighbourhood, there were plenty of interested buyers who walk in and register on auction day, and bring heat to the competitive bidding.”
Home values are ticking up steadily and are on track to hit a fresh high nationally later this year, after making up the losses last year when rates began rising, according to CoreLogic.
Asking prices are already hitting a record high nationally, as well as in the Sydney, Brisbane, Adelaide and Perth markets, according to analysis from SQM Research last week. The highest recorded median asking price was for Sydney houses, which reached $1.873 million.
Veteran analyst Louis Christopher, founder of SQM Research, described the market as “not too hot and not too cold” as the spring selling season gathers momentum.
“At this point in time, the market is favouring sellers, but not by a huge margin. I would still regard the market being in in in overall balance where the pendulum is slightly favouring sellers and hence why we’ve been recording rising prices this year.”
“The much-feared fixed rate mortgage reset – which was going to see thousands of sellers of property owners sell, and it was going to create the market downside – that hasn’t materialised yet. That isn’t to say there isn’t stress out there, but many owners have managed to hold on.”
“Unless we see a downturn in the economy where unemployment does get up to 5 per cent or more, this much-feared fixed mortgage rate reset is not going to play out in any major adverse way.”
Among the smaller markets, Brisbane’s preliminary clearance rate was 72.3 per cent, Canberra was 56.5 per cent and Adelaide was 80.8 per cent, according to CoreLogic’s preliminary tally.
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