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AS the dust settled on the first interest rate rise in more than a decade, many Australians were focused on how it would impact today’s auction results.
Auction punters were out and about despite the Reserve Bank of Australia’s announcement of a rate rise on Tuesday. Australasia’s leading real estate group, Ray White, recorded a preliminary 66 per cent national clearance rate and an average of four registered bidders and 2.7 active bidders at auctions today.
However, Ray White chief economist Nerida Conisbee said the recent slowdown in market conditions was not necessarily bad news.
“Prices have increased by 30 per cent since the start of the pandemic. This level of growth is not sustainable and at some point, conditions had to slow,” she said.
“Right now, the most popular forecast being reported is for a 10 per cent fall in prices. Such a fall would take Australian median house prices back to October 2021.
“Almost everyone who purchased during the pandemic will still have seen a capital gain even if such a sharp fall in prices did occur.”
In the meantime, the auction method still netted sellers a strong return. On average those who make it to game day achieved more than 13 per cent more on their sale price than if they had sold prior.
Today’s top sale belonged to regional New South Wales. Ray White Yamba principal Daniel Kelly sold 62 The Mainbrace, Yamba for $4.255 million - $355,000 above reserve. The buyers were a couple from west of Yamba looking for “their little piece of Yamba” according to Mr Kelly.
Meanwhile, Ray White Glenelg’s Christopher Jenman recorded the most registered bidders at an auction today. Mr Jenman sold 3 Park Rd, St Marys in front of a crowd of 22 registered bidders for $973,000.
SYDNEY
Ray White New South Wales chief auctioneer Alex Pattaro said the interest rate rise hadn’t affected top tier properties.
“Top tier properties continue to be the first choice for all buyers, however new buyers entering the market have concerns around rising interest rates. Property prices this week look stable despite some listings passing in,” he said.
“Sellers can take confidence in the four registered bidders Ray White auctions in Sydney are attracting and that they are still obtaining the best possible price for the market.”
93 Lakemba St, Belmore
Ray White Ausban, Navid Nawaz - 0402 604 766 and Moiz Shah
Sold for $1.6 million - $500,000 above reserve
Seven registered bidders, five active bidders
Auctioneer: Alex Pattaro, Ray White NSW chief auctioneer (pictured above with Mr Nawaz)
“Bidding began at $1.1 million, the auction was a great show with some good competition. The seller was motivated and willing to sell in line with the market,” Mr Nawaz said.
“The buyer has a warehouse nearby and wants to use the land to build another warehouse since the block has commercial potential.
“In this area the house market is still crazy. People are willing to pay extra for a good house that has a good prospect. The interest rate rise hasn’t concerned people in the area since at the moment it’s not going to make a huge difference week to week but if interest rates keep going up the market will slow down more.
“But Belmore and Lakemba have always received plenty of interest. People want to come here because it’s affordable but still has a lot of good local amenities.”
1/54 Grose St, North Parramatta (pictured above)
Ray White Parramatta, Broderick Wright - 0416 194 157 and Emile Corbino
Sold for $1.1 million
Four registered bidders, one active bidder
Auctioneer: Paul Wright, Ray White
“Bidding started at the reserve and that’s where it sold with one bidder,” Mr Wright said.
“The purchaser was bidding on behalf of a Victorian international wool supplier, Techwool Trading. They have warehouses here in Sydney so they wanted something local to run their business out of and accommodation for staff when they travel here,” Mr Broderick said.
“I think if owners are serious and happy to meet the market they are still achieving good prices but those going off November and December prices are getting stuck. We’re entering a normal market now and with interest rate rises buyers feel like they have something to hold on to.
“They have become wary of paying too much but auctions are pivotal in helping buyers understand market value. In Parramatta where property is attractive, we’re still seeing auctions do well across the board with buyers competing strongly.”
BRISBANE / GOLD COAST
Ray White Queensland chief auctioneer Gavin Croft said it had been an interesting week for the property market.
“It was an interesting week in the lead up to today with a lot of talk around the upcoming election and interest rate rises,” he said.
“So there was just that little bit of anticipation about how buyers will behave today with the understanding of a few of these moving parts going on in the background.
“But today it's been really strong and it's been competitive.”
Ray White Prestige Gold Coast, Jackson Paradise - 0402 692 544
Sold for $3.65 million
10 registered bidders, five active bidders
Auctioneer: Andrew Bell, Ray White (pictured above)
“The buyers were a local family upsizing from another suburb on the coast while the sellers were downsizing and moving to a different area nearby,” Mr Paradise said.
“We’re not seeing much of a slow down on the Gold Coast, it’s still very strong. We had over 100 inspections throughout this campaign which is a very good number.
“Because this area generally has larger blocks, we’re seeing a lot of people wanting more space for them and their families showing interest, particularly in Ashmore.
“We have noticed that interstate interest has slowed down. The majority of bidders today were locals.
“None of our buyers or sellers have approached us with concerns over the interest rate rise. It was always going to go up and there has been strong bidding at auctions on the coast and overall still a strong market.”
Ray White Ashgrove, Tamara Lee - 0421 767 034
Sold for $1.66 million
Eight registered bidders, four active bidders
Auctioneer: Adam Downes, Ray White
“The buyers (pictured below) live in the suburb over, they are upgrading and aware of the growth happening in the Kelvin Grove market,” Ms Lee said.
“The sellers (pictured above with a photo of the house when they first bought it) have been in the house for 22 years, their daughter has had health issues so they decided it’s time for a new beginning and are moving to a more relaxing location near the water.
“The first person through the first open house of this home told me they believed the market was about to crash because of the pending interest rate rise but I disagreed. This is a double income market and most people are eager to get into Kelvin Grove and Ashgrove because of the education, parks and proximity to the city.”
ADELAIDERay White South Australia chief auctioneer John Morris said the front line news is telling exactly the same story as South Australian auctioneers are reporting.
“The front page of today’s Adelaide Advertiser states that while there seems to be a national cooling of the market, Adelaide is bucking the trend and continuing with the heat that we have enjoyed in the first quarter of 2022,” he said.
“It’s clear the heat is still on in the Adelaide market!”
Ray White Woodville, Peter Kiritsis - 0411 501 520 and Alex Ghinis
Sold for $1.375 million
11 registered bidders, four active bidders
“The buyers (pictured above right with the sellers on the left) are a young professional couple looking for a high quality, low maintenance home. I actually just left them at the house celebrating with the vendors. The sellers are a young family in the building industry and they are going to build their next dream home,” Mr Kiritsis said.
“It’s interesting that people are worrying about the rate hike because it’s not translating to anything in the local marketplace, buyers are still confident. I have had three auctions in the last 48 hours and all have gone over reserve.
“Sellers are excited about the market as well, I haven’t had any of my sellers raise any concerns yet. I’m not sure what the conversation will be in six months time but for now there are no issues for people.
“In fact, if you didn't pick up a paper or watch any media you wouldn't think anything is changing or slowing in the Adelaide market.”
Ray White Woodville, Jordan Ekers - 0477 037 710 and Peter Kiritsis
Sold for $854,000
11 registered bidders, five active bidders
“The auction went quickly, it reached reserve quite fast and then sold in excess of $100,000 of the reserve,” Mr Eckers said.
“The buyers (pictured above with Mr Ekers) were a young couple looking to renovate and restore the deceased estate which has been in the same family for more than 60 years.
“If today is anything to go by then the Adelaide market is still increasing. Yes, everyone is talking about interest rates but we’ve seen zero signs that the market is slowing.”
MELBOURNE
Ray White Victoria chief auctioneer Matthew Condon said auction volume was down today in comparison to previous weeks with 112 auctions scheduled across the state.
“This week's interest rate rise announcement has seen buyers approach auctions with more caution,” Mr Condon said.
“Based on preliminary data from the Ray White Group, registered bidders across Victoria remained strong and consistent while the average number of active bidders slightly declined.
“It's great to see that the market has adapted very quickly to this week's announcement with buyers and sellers alike factoring this into their decision making process.
“Overall, there continues to be a high level of demand for quality property across Victoria.”
Ray White Glen Waverley, Marc Lum - 0413 142 803 and Elvis Huynh
Sold for $1.25 million - $50,000 above reserve
Three registered bidders, two active bidders.
“The sellers (pictured above) have been in the home for 30 years and are now downsizing. The buyers are a young couple who were looking for a family home,” Mr Lum said.
“There’s still a lot of demand out there but buyers are picking the best stock on the market. I think they are also waiting until after the election but while traffic and demand has dropped from last year it is still a positive market.
“That’s why we are recommending presenting our listings in the best way possible because average stock is not selling, they are the ones struggling. Especially when build prices and timeframes have gone up. Buyers think they may as well go for something new.”
Meanwhile, Ray White Glen Waverley area manager Rick Cheah broke a record in the same suburb today. Mr Cheah sold 28 Gertrude St, Mulgrave for $1.927 million - a record for Waverley Park Estate.
Ray White Ascot Vale, Adam Hicks - 0438 066 259 and David Bignoux
Sold for $1.205m
Two active bidders
“The home has been in the family for more than 60 years. The purchaser (pictured above) was a man buying on behalf of his family,” Mr Hicks said.
“What we’re seeing is that renovator properties are selling easier in this particular part of Melbourne’s market. Many buyers are looking for something they can knock down and rebuild in this part of Melbourne but there’s not a lot of stock on the market.
“We’re definitely finding that these types of renovator properties seem to be attracting more bidders at auction day.”
