Battle of the buyers as shortage hits

Buyers are “fighting it out” over a historically low number of homes up for auction.

Shazzi Stewart at her Coburg, Melbourne, home that she intends to put on the market for the spring selling season. Picture: Aaron Francis

Buyers are “fighting it out” over a historically low number of homes up for auction, leading to skyrocketing clearance rates.

Experts warn those with premium properties should take ­advantage and put properties on the market while competition among vendors is low.

REA Group chief economist Nerida Conisbee said premium markets in Sydney and Melbourne were doing “astoundingly” well from the low volume of properties up for auction.

One penthouse at Bondi Junction, in Sydney’s eastern suburbs, sold for $2.7 million, $400,000 above the reserve price.

“If you’re in one of those premium suburbs, now is a great time to be in the market,” Ms Conisbee said, “You have all these buyers who seem to be fighting it out, and people do seem to be holding off (for spring auctions) and they may not do as well.”

According to preliminary results from CoreLogic, clearance rates in Sydney were at 81.2 per cent with only 365 auctions, down 20 per cent from last year’s 458 auctions in the same week.

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Nationally, just under 30,000 homes went on the market through July, down 24.7 per cent on a year ago. Sydney had the lowest number of July new listings since Core­Logic began tracking in 2007, down 32.5 per cent year-on-year. Levels have also fallen in Melbourne (down 29.3 per cent), Brisbane (down 19.8 per cent) and Adelaide (down 6.7 per cent).

Melbourne had similar results, with a strong clearance rate of 73.2 per cent accompanied by a low volume of homes — 501 auctions, down 30 per cent from 721 last year. Clearance rates consistently above 80 per cent have not been seen since spring 2016, Ms Conisbee said.

Interest rate cuts by the Reserve Bank took rates down to historic lows, while lifting lending restrictions made it easier to access credit, leading to more buyers in a shrinking market. The federal election dampened the usual March bump in new listings, with levels tracking at the lowest level in seven years..

Ms Conisbee said people were holding back and waiting to put their properties on the market in anticipation of a booming spring auction season.

The price growth in the premium market should have a ­“ripple effect” into the smaller, more medium-priced markets by the time the weather heats up, Ms Conisbee said.

Melbourne local Shazzi Stewart, 45, is in the process of repainting her Coburg home ahead of going to market in October. Saying she could list sooner, Ms Stewart and Ray White Brunswick agent Alex Ilyin decided to hold off until after the footy final to have the full attention of buyers. “There is nothing really around at the moment, so we thought we would do a spring campaign,’’ Ms Stewart said.

‘‘I hope vendors might become inspired. I’m thinking it is starting to be a good time for both buyers and sellers.”