Very early on in this recovery’: Demand outstripping supply
Nick LenaghanProperty editorMay 28, 2023 – 1.24pmThree-quarters of homes listed for auction changed hands over the past week as buyer demand outstrips what is on offer, pushing prices past owners’ reserves.
The preliminary clearance rate nationally hit 75.9 per cent, the highest success rate since early November in 2021, on CoreLogic’s preliminary tally, reflecting a slight increase on the previous week’s preliminary figure. In Sydney, the clearance rate hit 78.5 per cent and in Melbourne it was 77.1 per cent, both advancing on the previous week.
A one-bedroom apartment in Sydney’s Newtown sold well above reserve to a first-home buyer on the weekend. Peter Rae
That strength of demand as buyers – including first home buyers and investors – race to lock in deals ahead of the traditional winter slowdown, is putting a solid floor under prices. Despite 11 rate rises over the past year, house prices are climbing and could potentially rise by 10 per cent this year in Sydney.
In Sydney, a one-bedroom apartment on Laura Street in Newton sold $117,000 above its reserve for $847,000 to a first-home buyer. Its owners had been first-home buyers too.
“The first reason the property attracted so much interest is that there’s not much stock on the market,” said Ray White Surry Hills lead agent Astrid Joarder.
Advertisement“There’s such a high cost and lead time on renovations at the moment, so first home buyers are looking for something ready to move into, whereas, historically, it’s been homes that needed a bit of work which would attract first-home buyers.”
Veteran analyst Louis Christopher, SQM Research founder, said clearance rates, while very strong, may have peaked for the time being after steadily strengthening over previous months.
‘It’s very early on in this recovery’
“It’s very early on in this recovery. First-home buyers are active in the market. They are being squeezed by the rental market. Investors are also active, they’re capitalising on the increase in rents,” he said.
“All buyers for keeping one eye on the Reserve Bank of Australia. If the RBA were to lift rates again next week that could pause the market, it could create the false dawn in the market that we’ve been a little cautious about for the year.”
In Melbourne, a three-bedroom townhouse in Armadale, at 5/29 Huntingtower Road, in the city’s leafy east solidly beat expectations. It sold for $2.38 million, ahead of its $2.3 million reserve and the earlier price guide of $1.9 million to $2.09 million.
AdvertisementIn its favour is its proximity to nearby the High Street shopping strip and Lauriston Girls’ School, said selling Nicole Gleeson of Kay & Burton, the agency which handled the property.
“There is a real demand for single-storey homes among downsizers. However, the interest for this home was widespread given its capacity to accommodate a family through the three-bedroom, two-bathroom layout,” she said.
“Bidding was opened by one of the bidders which is always an excellent sign, and it was competed for all the way through to the end, which was well above where our expectations were”.
Melbourne-based buyers agent David Morrell, of Morell & Koren, said looming winter school holidays were the end to the traditional selling school holidays, adding further motivation to buyers in the market.
“What you see now is what you’re going to get. The plug-in-and-play mentality has come to fore. In other words, they just want to move in and will really pay for it. The ‘renovator’s delight’ is not appealing to people now.”
Among the smaller capitals, auction volumes rose in Brisbane and Adelaide, while holding steady in Canberra. Adelaide recorded the highest clearance rate at 81.8 per cent, followed by Canberra on 67.8 per cent and Brisbane at 60.3 per cent, according to CoreLogic’s preliminary tally on Sunday
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Nick Lenaghan edits the property section, which covers all aspects, from residential real estate and housing and construction to commercial property – office, retail, industrial – and major ASX-listed developers and real estate investment trusts. Connect with Nick on Twitter. Email Nick at nlenaghan@copyright link
Very early on in this recovery’: Demand outstripping supplyNick...
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