As fewer and fewer properties become available and buyers duel it out in the market, homes are selling far above their expected reserves. This was recently seen in Sydney’s Lane Cove, where a semi-detached three bedroom home was listed for auction at $2.55 million with 39 contracts issued.
After eleven buyers registered and four put in bids, the final sale price for the property came to a total of $2.76 million. It’s no secret that listings generally slow down during the winter season and with schools off for the holidays, this basic law of supply and demand is sure to have an effect on the current inventory.
On a national level, the most recent figure for clearance rates hit a five-week high of 74.5 per cent, according to figures from CoreLogic. In Sydney, the clearance rate was even higher at 75.6 per cent as the number of listings dropped to 564 from 676 in the preceding week.
In Melbourne, it rose to 72.8 per cent with a slight increase in auction numbers from the prior week. The Reserve Bank’s rate rise pause from last week isn’t expected to have much of an impact on the current market.
Veteran property market analyst Louis Christopher from SQM Research believes that it won’t stimulate renewed confidence, particularly when fixed rate mortgage holders are about to feel a notable difference in their payments. It’s possible that some vendors who are feeling the pinch could be more willing to sell. Although there haven’t been signs of a surge in distressed sales so far, other investors may be looking to jump ship, as seen with a tick-up in investors who want to get out of the market.
In cities like Brisbane, even as listings fell close to 20 per cent from the previous week, the preliminary clearance rate was still an impressive 69.1 per cent. For a four-bedroom architect-designed property in the suburb of Hendra, a record was broken with its sale amount of $5.34 million.
A major contributor to the sale seemed to be a buyer who made their way down from Hong Kong, and by buying at the auction, they may have saved themselves from three years of construction dramas and stress. Due to high demand, it’s no doubt that buyers currently find themselves in a difficult situation with a limited number of properties available.
It’s clear that with the winter’s lull and other economic pressures, supply is sure to dampen, and with aggressive buyers vying for whatever stock is available, it’s likely to be them who come out on top, though such gains are made at a premium.