Many properties in Sydney are changing hands for prices below owners’ expectations, but with 63.5 per cent of homes selling under the hammer over the weekend, the market is showing resilience.
It is a different story in Melbourne, with the city in its third weekend of lockdown due to an outbreak of COVID-19 and only 45.4 per cent of the 527 properties scheduled selling at auction.
Melbourne is the weakest of the capital city markets, with values down 2.3 per cent after falling for three consecutive months.
The Sydney market has been more robust over the course of the pandemic, recording a 0.8 per cent decline over the three months to June 30.
While there were some standout results over the weekend in Sydney – a large unrenovated terrace at 14 Great Buckingham Street in Redfern sold for $520,000 over its reserve – Sydney-based auctioneer Damien Cooley said most properties were either selling at or below expectations.
“There is no doubt what is happening in Victoria is feeding into the mindset of Sydney vendors and vendors are more inclined to take prices now not really knowing what the next six months will hold,” he said.
Mr Cooley said the auction of a renovated three-bedroom house at 116 Sturt Street in Kingsford on Saturday with two registered bidders was indicative of the current market.
The property sold for $1,823,000, slightly less than the $1.85 million reserve set by the vendors.
“We are seeing vendors strategically setting their reserves a little higher in the event they want to negotiate. And that’s an example of one that had a reserve that was about $50,000 more than they would have sold the property for,” Mr Cooley said.
The top sale over the weekend was a five-bedroom home in Woollahra for $8.1 million. The guide had been around $8 million.
“It was well attended and we had three or four registered bidders. They’d done a fairly significant excavation at the front to add the double garage, which made a big difference in terms of the level of interest,” The Agency’s Ben Collier said.
“Prices [at the top end] are stable. There is a high degree of price sensitivity but if you price it appropriately there is definitely interest. Virtually every open for inspection is well attended, but if you can’t support the guide with comparable data the market will punish you for that,” he added.
While Melbourne’s clearance rate has fallen below 50 per cent for two consecutive weekends Ray White’s Victoria chief executive, Stephen Dullens, is adamant that this time around Melburnians were more comfortable with the lockdown and more accepting of online auctions, which meant the property market is faring well.
“Our clearance rates and active bidders are more than double what they were in March,” Mr Dullens said.
“We are obviously not at the highs we were seeing at the end of last year or in February but in terms of the fundamentals it all comes back to supply and demand and there’s just much less supply,” he said.
Melbourne buyer’s agent Emma Bloom said despite a low clearance rate there was no evidence of price falls at the top end of the market.
“A-grade properties are still being competed for because there is no supply and there’s still demand,” Ms Bloom said.
“Everything is either selling before auction or they are expression of interest campaigns as opposed to auctions and that is sellers basically saying, ‘if you’ve got an offer in the my range I’m going to sell it to you’.”
At the other end of the market on Sunday morning, a Melbourne investor in lockdown knocked out 24 other bidders in an online auction through Ray White to buy a modest brick home, sight unseen, in the regional town of Benalla. The home sold for $245,000, well above the $130,000 reserve.
(AFR – July 2020)
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