Property: Auctions hammered as clearance rates tumble
The auction market continues to fade after the pandemic boom, with forecasters predicting winter auctions will soon fall below a 50 per cent under-the-hammer success rate.
The auction market continues to fade after the pandemic boom, with forecasters predicting winter auctions will soon fall below a 50 per cent under-the-hammer success rate.
Clearance rates below 55 per cent are typically accompanied by price declines, Westpac senior economist Matthew Hassan has long noted.
Of the 624 weekend Sydney results collected so far by CoreLogic, just 55 per cent were successful.
CoreLogic head of research Eliza Owen calculates that it is the lowest weekend preliminary clearance rate since April 2020. In the depths of the Covid-19 pandemic panic the clearance rate dipped to 32 per cent one weekend.
“Once the remaining results are collected, Sydney’s final clearance rate may slip into the 40 per cent range or just manage to hold above 50 per cent,” Owen suggests.
Sydney’s clearance rate is catching up with falling home prices, according to AMP Capital chief economist Shane Oliver.
He expects the rate to go down to the low 40s and then spend time bouncing around the bottom over the next 12 to 18 months before a recovery finally begins.
He blames “poor affordability, rising fixed and now variable mortgage rates, along with weak buyer confidence”.
CoreLogic’s Tim Lawless notes that a transition towards a market that favours buyers over sellers is also being seen in the private treaty market, with the median number of days-on-market gradually rising and vendor discounting rates becoming larger.
The intra-month trend in CoreLogic’s Home Value Index continues to “lose steam”, led by Sydney down 1.2 per cent and Melbourne down 0.8 per cent over the past four weeks.
Di Henneberry, a Sydney buyers agent, said the most common response from her clients was: “I’ll wait a few months until the market dips further.”
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Killara classics
Sydney’s Killara had the nation’s top notified sale at the weekend when $12,155,000 was paid through the Black Diamondz agency for a six-bedroom art deco house.
Set on a 2205sq m Springdale Rd block with court and pool, there’s a 796sq m floorplan after its 2018 renovation, including new chef’s kitchen with double granite islands, two Miele dishwashers and two Vintec fridges. There’s a gym, office spaces, media room and a wine tasting room.
It last traded with a 578sq m floor plan when bought by the Sheh family at $4.4m in 2016 from the former Ku-ring-gai mayor Jennifer Anderson and her husband James, who was a board member at BlueNRGY.
The home was designed in the 1930s by architect John Aubrey Kerr and featured a sweeping oak staircase, recessed ceilings, large windows and a marble fireplace.
Killara’s record price sits at $16.5m when the house two doors along was sold last November. The sale just eclipsed the $16.3m record set in July last year on the other side of Springdale Rd.
East Killara’s historic estate Wharncliffe which was listed late last year, seeking a record $20m, but there’s been no news of any sale. The 1939 Springdale Rd Georgian revival residence on 7500sq m was built at a cost of £600 for metal merchant William George Wright, featuring a grand sandstone facade and a columned portico designed by architect Clifford Finch. Wharncliffe was listed by Hong Lu, director of the property developer Qiantang Investment, and his wife Jia Yan,who paid $7.8m in 2010.
The weekend also saw 113 Springdale Rd, East Killara sell for $5.32m through William Chan from Marshall. Chan. Yahl. North Shore with 12 registered bidders. The Sunday Telegraph reported all were of Chinese Australian descent, with five parties active once the auction kicked off at $4.2m.
The result was “a statement about this home, not about the market” according to auctioneer Clarence White.
Over at Lindfield, it was the rare chance to buy a newly built home that brought strong bidding for the offering at 11A Nelson Rd which fetched $7.25m. Three of the four registered bidders competed through McGrath agent Glenn Curran.
“There was strong interest in this property, with more than 110 groups inspecting,” Curran said.
“Buyers liked the fact that the house is only two years old.”
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A $9m knockdown
After the biggest interest RBA cash rate rise in 22 years, more than 1260 Melbourne properties were scheduled for auction over the past week. Of the 1016 results collected so far by CoreLogic, 58 per cent were successful. The previous week’s tally was revised down to 52 per cent at final figures.
Melbourne’s top sale was $9.05m in Toorak with the sale of a knockdown home at 23 St Georges Rd. The two storey Old English-style residence sits on a 668sq m holding which last traded in 2000 at $1,426,000.
There had been an $8m to $8.8m price guide from Hugh Hardy, the Abercromby’s selling agent.
There were over 8200 views on realestate.com.au during its marketing.
Another Old English-style Toorak listing, 10 Merriwee Crescent, did not sell after being offered with a $4.8m to $5.28m guidance, and it now has a $5.25m asking price through Mark Harris at Marshall White.
The home was designed by architect Robert Bell Hamilton, who was also member of the Legislative Assembly for Toorak.
It was briefly owned by McCann Erickson Advertising in the late 1970s – intriguingly for just nine days in something of a quick change of plans.
Anne Flaherty, an economist at PropTrack, noted that the seasonal slowdown was under way following Super Saturday, with 1014 auctions scheduled this week, then 619 in the first week of July.
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Around the capitals
With 179 listings, Adelaide’s 70 per cent was the highest preliminary weekend clearance rate, followed by Canberra at 64 per cent and Brisbane at 52 per cent. New Farm was a hotspot among Brisbane’s 174 listings, and sales included a riverfront at 76 Oxlade Drive that fetched $5.52m. Marketed as “flood free freehold,” the three-bedroom home last sold at $2.55m in 2011.
Three of the four registered bidders participated in the auction, with the sellers off to northern NSW for a tree-change.
Canberra’s top sale came when Mario Sanfrancesco of Blackshaw Real Estate secured $5.06m for an original home with modern extensions on National Circuit, Forrest.
It was designed in 1927 by Oakley & Parkes, who also designed The Lodge. It last sold at $2.98m in 2016, the first time in 26 years.
There had been seven repeat inspections, with three registered bidders enthusiastically seeking the keys.
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