Keen buyers’ hands up as property auctions soar

Sellers at auction reap rewards of red-hot market blowing reserve prices out of the water.

Kellie Ker relaxes with her dogs, Johnny and Peachy at her home in Tallebudgera Valley, west of the Gold Coast. Thirty registered bidders competed for Kellie Ker's acerage home in the Gold Coast hinterland. Picture: Lyndon Mechielsen/ The Australian

Four in five properties taken to auction at the start of the year have sold, as rising heat in the market causes buyers to blow reserve prices out of the water.

While the number of homes offered over the past five weeks has been lower year-on-year, sellers who have tried their hand at auction have reaped the rewards.

Data house CoreLogic has recorded clearance rates holding above 80 per cent since the auction season began in the first week of February. Red-hot Sydney and Melbourne have nudged close to 90 per cent sales success, while buyers in the traditionally quieter Brisbane and Adelaide markets have purchased under the hammer at rates 30 per cent above the long-term average.

My Housing Market chief economist Andrew Wilson said the market was in catch-up mode after two years of disruptions from the banking royal commission, the 2019 federal election and the pandemic.

“It’s an extraordinary market, there is no weak link anywhere,” Dr Wilson said.

“You’d be a mug not to go to auction and let buyers fight it out on the nature strip.”

It wasn’t until Kellie Ker, 51, was recommended to auction her acreage home at Tallebudgera Valley, in the Gold Coast hinterland, by Ray White Tugun agent Daniel Tavener that she had even considered the idea.

The gamble paid off two weeks ago when 30 registered bidders pushed the price significantly above reserve, with the hammer falling on a bid for $1.725m.

“We decided on auction as it was hard to put a price on the property that is so unique,” Ms Ker said. “We thought we’d let the market decide.

“We didn’t know what price to put as our reserve so we were ecstatic with the outcome.”

But Dr Wilson warned the strong results were unlikely to last long-term.

“I think the Sydney and Melbourne market will run out of steam by the end of the year, all the market is doing now is catching up. It’s going to be a wild ride until then,” he said.

Loan Market executive chairman Sam White said brokers across the network were dealing with increasingly frustrated buyers. But, the competitive nature of the market has yet to cause bidders to become trigger happy despite FOMO, the fear of missing out, setting in.

“Across different socio-economic demographics, I don’t think there is a quiet region anywhere,” Mr White said.

“We haven’t heard stories of buyers getting over their head yet,” he said. “We have heard them getting angry. Buyers are feeling pressed to find something. “We are also seeing brokers dealing with the long turnovers and the banks are getting quite weary.”

Sydney prestige agent Ben Collier, of The Agency, said all markets were booming as confidence inspired people with means to upgrade their home.

“During COVID-19 people were concerned about what it meant for their respective industries and businesses … we have come out the other side of COVID-19 better than first anticipated,” Mr Collier said.

“This progress combined with growing confidence in the real estate market as a whole has led to people feeling more confident about scaling up towards their next home.”