Three-quarters of homes listed for auction sold in the past week, with clearance rates ticking up as buyers chased a diminishing number of properties for sale.
Overall listings have dropped – down 8.1 per cent on the previous week and 12.9 per cent lower than the corresponding week last year – due to a combination of the winter slowdown, school holidays and concerns over further rate rises.
The three-bedroom home in Sydney’s Lane Cove sold for $2.76 million on the weekend, comfortably above its reserve.
But as buyers scramble for a shrinking pool of stock, some homes are being sold comfortably over their reserve, such as the three-bedroom home in Sydney’s Lane Cove which sold under the hammer for $2.76 million on the weekend.
The reserve for the semi-detached home at 34A Kara Street was $2.55 million, with plenty of interest during the campaign – led by Belle Property Lane Cove’s Patrick Land and Jess Goodman – with 39 contracts issued. Eleven buyers registered and four bid.
“Stock is very low in our area and that property was exceptionally well presented. It attracted a very diverse range of buyers, both young families and downsizers,” Mr Goodman told The Australian Financial Review.
“It’s traditionally a time when there is less stock on the market. When you’re already in a low-stock market, it exacerbates the situation.”
Nationally, the preliminary clearance rate jumped 4.2 percentage points on the previous week to hit a five-week high of 74.5 per cent with just 1418 properties listed for auction across the capital city markets, on CoreLogic figures.
Sydney’s preliminary clearance rate was 75.6 per cent as listings fell to 564 from 676 the previous week. In Melbourne, auction numbers ticked slightly higher and the clearance also edged up to 72.8 per cent.
Last week, the Reserve Bank of Australia put its rate-rising cycle on pause for at least another month, although economists still expect the cash rate to go higher.
Veteran property market analyst Louis Christopher, founder of SQM Research, said the latest pause in cash rate rises was quite different from the earlier pause in April, which had led to renewed confidence in the housing market at the time.
“I don’t think we’re going to get that, this time around. They’ve gone on pause, but I think there is a renewed sense of caution in the market. Has the RBA actually hit peak rates or not? Are we actually at the top? There are renewed fears that we’re not,” Mr Christopher said.
“And then, of course, we’re hitting the peak of the fixed-rate mortgage rate resets. Those people will be resetting from a fixed rate of around 2-plus per cent to a variable rate of 6-plus per cent. That’s a significant hit.”
While there was little sign yet of any pick up in distressed sales, there would nevertheless be some vendors who are “a little bit more keen than others” to sell as borrowing costs rise, Mr Christopher said.
“I’m hearing there are actually a lot of investors looking to sell. There’s been a tick-up in investors just wanting to get out of the market.”
Among the smaller capitals, Brisbane’s was the busiest over the past week even though auction listings fell close to 20 per cent on the previous week. The preliminary clearance rate in the Queensland capital hit 69.1 per cent. In Adelaide it was 86.2 per cent, and in Canberra it was 76.3 per cent, according to CoreLogic.
Among the Brisbane sales, a four-bedroom, architect-designed home opposite parkland in Hendra sold for $5.34 million, setting a record for the suburb.
“There was some aggressive bidding today,” Ray White New Farm lead agent Tom Lyne said after Saturday’s auction.
“The buyers were serious, all locals plus one buyer from Hong Kong who flew down ahead of moving back to Brisbane soon. The new owners have just saved themselves three years of build dramas and stress by buying here.”
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