Feb 9, 2020 – 11.24am
Auction clearance rates jumped to 80 per cent in Sydney and 75 per cent in Melbourne this week, even as listing numbers more than doubled, providing strong evidence of the strength of the rebounding housing market.
In weaker markets, a rise in auction listings would normally trigger a drop in the clearance rate, but buyers – especially those purchasing their first home – have snapped up the higher number of homes for sale after being starved of opportunities previously.
This four-bedroom Lane Cove home sold for $3.165m to a young family.
With house prices rising 0.9 per cent in January and forecast to rise 8 per cent this year, according to upwardly revised ANZ figures, estate agents reported high numbers of first-home buyers bidding for properties.
More than 5700 have signed up for the federal government’s First Home Loan Deposit Scheme, which enables buyers to get into the market with only a 5 per cent deposit – and without having to pay lenders mortgage insurance.
“There’s still a shortage of stock and many first-home buyers believe now is the time to buy, believing prices are set to rise. There is a strong sense of competition in the market right now,” said Ray White NSW chief auctioneer Alex Pattaro.
On Sydney’s lower north shore, first-home buyers paid $1.04 million for a large two-bedroom apartment in Wollstonecraft.
Selling agent Tom Scarpignato of Belle Property Neutral Bay said the market had picked up where it left off last year and would continue to be buoyant for the first half of 2020.
“We auctioned this one early in February to capitalise on the strong demand that existed pre-Christmas,” he said.
In Melbourne, Ray White Ferntree Gully agent Matt Morris sold a three-bedroom weatherboard home at 33A Gaydon Street to first-time buyers.
First-home buyers paid over $1 million for this two-bedroom apartment on Sydney’s Lower North Shore.
Mr Morris said all 10 bidders were first-home buyers who lived within 10 or 15 minutes of the home, which is near the local primary school.
“It was a fast and furious auction which lasted just 11 minutes,” he said.
“The home was called on the market at $600,000 and sold at $620,000. The owners are over the moon – they had subdivided their block and moved to another house out the back – while the new family will move into 33A.
CoreLogic and Domain recorded a 79.9 per cent preliminary clearance rate in Sydney from more than 400 scheduled auctions, up from final figures of 72.9 per cent and 76 per cent respectively last week when the auctions numbered well below 200.
In Melbourne, where there were a similar number of auctions, CoreLogic recorded a 74 per cent preliminary clearance rate – up from a final 65.8 per cent last week, with Domain reporting 74.5 per cent, up from 67 per cent last week.
Nationally, the clearance figure rose to 69.4 per cent from a final 61 per cent on CoreLogic numbers and came in at 74.7 per cent, up from 68.3 per cent on Domain figures.
AMP Capital economist Shane Oliver expected a final clearance figure of 76 per cent for Sydney and 74 per cent for Melbourne – “both strong” results.
Dr Oliver noted that listings were up 70 per cent on a year ago in Sydney and 40 per cent in Melbourne, which is “only starting to pick up after the Christmas/New Year slowdown, but still well down on boom time levels”.
Across the smaller cities, the performance was varied – 77.8 per cent of homes were successful at auction in Canberra but only 36.4 per cent of homes sold at auction in Brisbane, according to CoreLogic.
CoreLogic auction market analyst Kevin Brogan said the final national clearance rate was expected to be lower than the 69.4 per cent. but would probably come in higher than last week’s final clearance rate of 61 per cent.
“Over the coming weeks, we are expecting the number of auctions to rise further, providing a timely test of the market’s depth,” Mr Brogan said.
Ray White had 375 auctions booked over the past week, up 26 per cent on the same week last year, and recorded a 74 per cent clearance rate.
In Sydney’s Lane Cove, Robert Orie, chief executive of the Sir Moses Montefiore Jewish Home, and his wife, Cathy, sold their four-bedroom home for $3.165 million to a young family from the Lower North Shore. The reserve was $3 million.
Belle Property Lane Cove’s Simon Harrison and Jess Goodman said three buyers bid for the property and more than 100 people attended the auction.
“We are running shorter [auction] campaigns – three weeks instead of four, due to the uplift in buyer activity,” said Mr Harrison.
In Glebe, Shehara Wije-Tunga and her husband Richard sold their two-bedroom Glebe terrace to a downsizer for $1.691 million.
Selling agent Matthew Carvalho from Ray White Surry Hills said more than 80 people attended the auction which had 12 registered bidders.
“It was a great auction with a lot of young couples interested. My vendors are so happy with the result. It’s been on the market for four weeks but it was originally a five week campaign and has been brought forward due to the interest,” Mr Carvalho said.
“Supply is still tightly-held in the Glebe area and everything we’re listing is selling well.”