SYD & MEL Property Remains Strong Despite The Uncertainty
Volumes at auction fell away over the weekend, but there is still strong interest from buyers despite a sense of uncertainty in the air.
Despite growing levels of uncertainty in the air, auction markets across the country remain relatively buoyant.
While auction clearance rates are down slightly, there is still strong buyer interest across the board in both Sydney and Melbourne.
Sydney recorded a preliminary clearance rate of 74.8% from 749 auctions while Melbourne came in slightly lower at 70.1% according to the latest data from CoreLogic.
Across the country, the combined clearance rate was 70.6% and is still relatively strong. While some would-be buyers might be getting nervous, there appears still plenty of people unfazed by world events.
Sydney - ’Buyers still have the blinkers on’
Leading Sydney Auctioneer, Leon Axford of Axford Auctions says it was another strong weekend under the hammer with virus worries not really impacting the buyers in Sydney.
“Our auctions went at 90%, with the only one that didn’t sell being withdrawn. All of them very strong results with a lot of buyers.”
“What we’re seeing right now is that the buyers that we’re working with have typically been pre-approved for several months and have been missing out on properties and now just want to secure something.”
“It really feels like they’ve got the blinkers on and they’re just ignoring all the noise that is out there.”
With global conditions still yet to fully impact the market in Australia, Mr. Axford believes it’s the next round of buyers that will have the most impact on property demand.
“Right now we’re fine. The question becomes the next round of buyers. The ones we haven’t met yet. The ones that perhaps we never get to meet because they don’t enter into it. So it feels like we’re fine for the next month. But it’s a week to week thing given everything that’s happening.”
“The question becomes, what will come with those next round of buyers. Are they severely cautious or do they just get on with things?”
Mr. Axford had strong bidder numbers across the weekend and that was highlighted by a strong sale in Mount Collah.
“We sold a property on the weekend at 23 Jersey Street, Mount Collah, where we were expecting 10 bidders. We had 8 because the two that didn’t register in the end had bought that morning.”
“The eventual purchaser had been looking for a year and missing out and was just sick of it and just paid what he had to pay.”
“And this is what we’re seeing at the moment across the board.”
Results are strong
Leanne Pilkington, REINSW President says results in certain pockets of Sydney are still incredibly strong.
“We had 749 auctions with a clearance rate of 74.6 per cent. Last week we finished up with a 75.2 per cent clearance from 830 auctions. So numbers are down, clearance rates are down and that’s not unexpected but, let’s face it, a 74 per cent preliminary clearance is still really, really high.”
“There are some areas that are having 80 per cent plus clearance rates, so Ryde, Parramatta, Blacktown and the Northern Beaches. So it’s very, very strong market in those areas. Just to give you some context last year, 638 auctions for the same weekend with only a 54.2 per cent clearance rate.”
Victoria - ‘Confidence is high’
Top Auctioneer from The Auction Company, Paul Tzamalis, oversaw a very strong weekend, with good bidder numbers and good crowds across Melbourne.
“We had a very good week - we conducted 11 auctions across last week, with 9 selling. And even the properties that haven’t sold still averaged two bidders, which demonstrates that people are still confident and willing to participate at auction.”
Despite the negative headlines, Mr. Tzamalis believes that property is uniquely placed to withstand any headwinds.
“The sentiment right now might have a bit of a question mark, but to the property market's benefit, we still have the lowest interest rates ever. And given the volatility in the stock market, there is every chance investors turn their attention back towards real estate.”
Over the weekend, Mr. Tzamalis oversaw a huge auction in one of Melbourne’s most prestigious locations.
“We had a really great auction on the weekend at 273 Swanston Street, which is one of the premier locations in Melbourne.
“The property was bought in the 1940s and owned by the Grandfather so hadn’t been offered to market in over 70 years. The auction attracted a crowd of over 150 people so, in a time when people are fearful, there was still a big crowd that included 7 bidders.”
“It started at $6.5 million before selling at $9.2 million, which is an outstanding result. It also demonstrates that people have money and they have been sitting on that money waiting for the right opportunity.”
Volumes strong in the inner-ring
REIV CEO Gil King says that buyers are still on the lookout for premium properties in good locations, particularly in the inner-ring.
“Last week, almost half of the Victorian auction sales were held in Melbourne’s middle ring, with over 280 homes. Led by Reservoir which sold 15 homes under the hammer.”
“From the suburbs which cleared 100% of auction listings last week, Coburg sold the most with eight homes. Bentleigh East and Cheltenham follow with seven properties each.”
“Sold last week for $3,450,000 was a beachfront property in 54 Nepean Highway, Aspendale – the suburb’s most expensive home sold through auction in the last two years.”