The national clearance rate is at its highest since May despite the number of auctions rising for the spring selling season, as more bargain-hunting buyers look for opportunities.
At 63.4 per cent, the preliminary clearance rate held above the 60 per cent mark for the sixth week in a row, even as the number of homes listed to go under the hammer rose 11.2 per cent on the previous week to 1799, according to CoreLogic.
A Chatswood home sold above reserve for $3.53 million on Saturday.
Sydney hit 61.3 per cent and Melbourne achieved 66.1 per cent, with the preliminary success rate inching higher in both capitals.
Veteran analyst and SQM Research founder, Louis Christopher, said it was clear that the clearance rates had bottomed out in July, although the market was still in a correction phase.
“I would expect that the rest of the spring selling season will be a little bit better than what we initially had concerns for,” Mr Christopher said.
“It’s still going to be a weak market. But there will be a few more buyers out there who will be looking to time the market, potentially believing the market could bottom out by Christmas and are looking for an opportunity to buy at a good price.”
“We are increasingly confident that we are not going to see a peak-to-trough decline [in prices] of anything like 25 per cent. With this downturn, it’s more looking like along the lines of about 8 to 15 per cent.”
Last week, the Reserve Bank of Australia lifted the official cash rate by 25 basis points to 2.6 per cent, a less-than-expected increase which suggested for some that the end of the rate-hike cycle was in sight, a potential boost for confidence among buyers.
“It’s definitely a weak market and it remains a downturn. However, it’s not the worst downturn we’ve ever had. If the RBA does go on pause or rates do peak then this will probably be the end of the downturn for this cycle. It still boils down to what the Reserve Bank of Australia does,” Mr Christopher said.
In Sydney’s inner-west suburb of Balmain, a renovated four-bedroom house with a price guide of $3.5 million sold on Wednesday for $4 million after one week on the market, to one of three potential downsizer buyers making offers for it.
But while the 5 Arthur Street home went for a strong price, all three of the potential buyers had asked for six-month settlements – twice the normal period – as the upsizing buyers they had sold their own homes to had asked for extra-long settlements to enable them to sell their own properties in a slower market, BresicWhitney agent Adrian Oddi said.
“People are giving themselves a huge window to sell their house,” Mr Oddi said.
“At the moment people feel the need to factor in a lot more time. It just gives them more flexibility and options with how they choose to negotiate with their buyer pools.”
This has a knock-on effect as it means that buyers such as the vendor of the Arthur Street home have to delay their next purchases.
“My client does want to buy, to get on with things as well,” Mr Oddi said. “But my client, given now the long settlement at play – considering what she’s trying to buy is a two-bedroom apartment and any two-bed apartment vendor is going to want a six-week settlement – my client, who would normally be already to make a move, will not go out shopping for property until November or December at the earliest.”
Elsewhere in Sydney, a four-bedroom home at 19 Beaconsfield Road in Chatswood sold under the hammer for $3.53 million as six bidders battled it out to take the house comfortably above its reserve of $3.45 million.
“This was a strong campaign right from the start. It was popular because it’s a beautiful character home with a double brick extension, an oversized level backyard, and it’s in a great location,” said Belle Property Lane Cove’s Patrick Lang, who brokered the property with colleague Monica Carollo.
Bidding on 19 Beaconsfield Road started at $2.85 million, with six bidders participating.
“The properties that are renovated and well-presented are still selling and selling well. We had an average of 30 to 40 groups a week through the home. Buyers are still out there, and for the right property, they are willing to compete.”
In Melbourne, a four-bedroom home at 183 South Road in the bayside suburb of Brighton East sold for $3.71 million. Its price guide was $3.7 to $4 million and the home went on the market at $3.5 million through the Kay & Burton agency.
“More than 20 bids were placed in the competitive auction, and the hammer finally fell at $3.71 million to a family with two young children who inspected the home for the very first time, today,” said Kay & Burton executive director, Alex Schiavo on Saturday.
But further up the real estate ladder, Emma Bloom of Morrell & Koren, a buyer’s agency which focuses on upmarket property, said some homes were being passed in at auction without bids.
“Buyers are probably thinking they have the upper hand at the moment and so [are] being cute and not doing anything [at auction] and then trying to steal it afterwards,” she said.
“But the market hasn’t fallen off a cliff and that’s a really big misconception out there. The price guide, usually and in most cases, is accurate and it’s where the sales are landing.”
Among the smaller capital cities, Adelaide was the busiest and achieved a 69.7 preliminary clearance rate, according to CoreLogic. Canberra hit 70.9 per cent while Brisbane fell to 49.4 per cent.
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