Buyers taking out home loans atthe fastest pace in three yearspushed auction clearance rates back up to pre-football-final levels, with four out of every five homes auctioned sold in Sydney on the weekend.
The preliminary clearance rate in the NSW capital rose to 82.3 per cent even as auction volumes more than doubled to 729 over the week to Saturday from 317 in the NRL grand final and long weekend-affected previous week, CoreLogic figures showed on Sunday.
While the preliminary figures, based on the results of 503 auctions reported, are likely to fall as more results come in, they are higher than the previous week’s preliminary figure of 79.8 per cent – later revised down to 74.7 per cent – and point to a higher final reading for the week just finished.
“The big story is we’ve seen the market tested with increased supply and haven’t seen clearance rates wavering at all,” CoreLogic commentator Kevin Brogan said.
The spring housing market is picking up fast. ABS figures on Friday showed both investor and first-home buyers roared back into the mortgage market in August, pushing new lending, including refinancing, up 4.5 per cent in August to $27.9 billion.
At the same time, new stock listings remain scarce. While new listings rose 44 per cent from early July through to the first week of October, the total of 22,939 fresh listings was still 13 per cent below the level of a year earlier and 15 per cent below CoreLogic’s 13-year average for this time of year.
In inner-western Sydney’s Drummoyne, a four-bedroom house on 540sq m pushed about $300,000 over its reserve price to sell for $2.18 million at auction on Saturday. There were six registered bidders for the 29 Dening Street home that was on the market for the first time in 60 years, LJ Hooker agent Alessio Scivetti said.
“With low stock on the market and buyers wanting to purchase quality real estate, this property proved to be very popular,” Mr Scivetti said.
“Buyers bid aggressively as they could see it was a much-loved family home.”
A one-bedroom unit at 8/13 Campbell Street, in nearby Balmain, sold $90,000 above reserve price at auction for $710,000.
Melbourne’s spring market also accelerated, with the preliminary clearance rate of 76.7 per cent – based on 755 reported results of the 977 scheduled auctions – higher than the previous week’s 73.8 per cent, which was later revised down to 70.5 per cent of the 775 auctions held.
“There are more buyers than there are properties and the buyers are chasing property in the market up, not down, which they were at the start of the year,” Melbourne buyers’ agent David Morrell said.
In the city-fringe suburb of Middle Park, an investor buyer beat three other bidders to pay $1.97 million for a two-bedroom brick house that was announced on the market at $1.9 million.
Buyers competing for the 37 Langridge Street home were willing to pay over reserve in the current market, Marshall White agent Ben Manolitsastold Domain.
“That fear of loss … is that if they don’t bid on this one, they’ll miss out on another one,” he said.
One sign of a stronger market is the recurrence of underquoting, a practice in which agents publish unrealistically low price estimates to drum up potential buyers and stoke competition, or set vendors’ expectations low in order to snag a higher commission.
Victoriatightened its quoting rules last monthin a bid to cut down on underquoting and last week, the Federal Court stung eastern Melbourne agency Hoskins Maroondah for almost $900,000 in fines and compensation.
“The Federal Court found that between 2015 and 2016, Hoskins Maroondah advertised 24 properties for sale at prices lower than the company believed they would actually sell for,” the state’s consumer watchdog said.
“The real estate agency also told two vendors it was acting for that their properties would sell for much less than the agency believed they would, enabling them to claim ‘incentivised commissions’ when the properties sold at a much higher price.”
With Su-Lin Tan
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