Hammer falling on half of all top-end home: PropTrack

Half of homes at the luxury end of the market offered at auction are selling under the hammer.

12 Tobruk Ave, Cremorne, will go to auction on April 22 unless sold beforehand.

Cashed-up buyers are proving they are not afraid of a bit of competitive sport, with half of all top-end homes selling under the hammer to the highest bidder.

Homes in some of the country’s most prestigious locations have proven to be resilient to the tougher economic conditions of higher interest rates and inflation, and strong deals are being made in the luxury space. Analysis by housing researcher PropTrack for The Weekend Australian has found that the more expensive end of the market is still competitive compared with the robust results being recorded more broadly.

Properties advertised on Realestate.com.au at $5m or above in Sydney and Melbourne have achieved recent clearance rates of just on 50 per cent, which is weaker than the 62.5 per cent achieved in each city generally.

In the smaller markets, where the top end is characterised as $2m and over, Adelaide was the strongest performer.

Luxury homes in the South Australian capital sold under the hammer 54.17 per cent of the time, compared with 67.45 per cent general clearance.

A third of auctions (33.3 per cent) in the most expensive end of the market in Brisbane were successful, although the result is reflective of weaker results there of (40.26 per cent).

Auction clearance rates are down on the same period last year across all price brackets.

PropTrack senior economist Paul Ryan said it was important to consider the results represent few homes, with only 5 to 10 per cent of auctions in each city are for properties in the higher price band.

“It's always likely that the top end of the market has lower clearance rates because valuations are much more negotiable or it’s unclear kind of exactly what fair value is when you get to these hyper-luxury ends of the market,” Mr Ryan said.

“Also, there are just fewer purchases in that range, so it is naturally harder to find competitive auction conditions where a vendor is happy to sell under the hammer.”

On Sydney’s lower north shore, The Agency – North property partner Jason Roach has bumped up the auction guide for a home in Cremorne due to strong demand through the first two weeks of the campaign, from $5m to $5.3m.

“My expectation is we will exceed that,” Mr Roach said. “We’ve been overwhelmed by the response.”

The wine cellar of 12 Tobruk Ave, Cremorne, is built to accommodate an existing piece of sandstone.

The recently renovated five-bedroom, five-bathroom home has so far attracted local families looking to upsize for more space and downsizers who are after low-maintenance living with no pool and limited landscaping.

The wine cellar and man cave has also proved to be an eye catcher. The room is built around a sandstone slab jutting through the wall.

The property is on track to go under the hammer on April 22, however, an offer may be accepted before then.

Mr Ryan said the top end of the market had been “reasonably resilient”.

During the past month there have been several big-ticket deals achieved under the hammer.

The duplex at 22 Victoria St, Watsons Bay in Sydney.

More than 200 bids were placed on a property in Sydney’s prized Watsons Bay when it was taken to market in March. After 45 minutes the final price was $14m. The sale was a staggering $6m above the reserve. Celebrity buyers agent Simon Cohen secured the property for a client via a phone call.

A block of eight apartments on a hill in the eastern Sydney suburb of Tamarama sold for $13m in March after fierce competition from developers, owner occupiers and investors. The site sold significantly above the $10.5m guide to a builder and developer who plans to knock it down and develop a set of luxury units or homes.