Lack of supply drives housing demand
The prospect of more interest rate cuts helped underpin the strong auction clearance rates in the Melbourne and Sydney property markets over the weekend.
Sydney reported an 86 per cent clearance rate from 363 auctions reported to Australian Property Monitors (owned by Fairfax Media), driven by a lack of stock.
In Melbourne, a clearance rate of 78 per cent was recorded from 837 auctions according to data collected by the Real Estate Institute of Victoria. (APM reported 80 per cent from 553 Melbourne auctions.)
One of the biggest auctions in Sydney was the historic mansion at 162-164 Albert Road in Strathfield, which sold for $3.187 million.
Fifteen bidders registered for the auction and about 10 different parties put up their hands to bid, Richardson & Wrench agent Paul Galassi said. The Victorian mansion has seven bedrooms and is on 2844 square metres of garden.
Mr Galassi said a genuine bid of $2.8 million started the auction and it sold for about $300,000 over its reserve.
Low interest rates are driving confidence and low volumes of stock are spurring people to bid competitively, he said.
Belle Property agent Nick Bedford said that "lack of stock is overwhelming demand. People are really fighting for it and that's why the prices are going up."
Mr Bedford sold 37 Boronia Avenue in Cheltenham at auction for $1.45 million. Ten bidders were registered, with six of them bidding on the day, pushing the price past its reserve of $1.325 million.
But some properties are selling bang on their reserve. A five-bedroom house at 9 Welham Street, Beecroft, fetched $2.2 million after bidding from three parties, Mr Bedford said. "The change in government and low interest rates are also factors driving the market," he said.
In Maroubra, three of the six registered bidders for the auction of 21 Mermaid Avenue put their hands up, and it fetched $3.1 million. The two-storey property has three bedrooms and a pool.
Home Estate Agents agent Andrew Anastassiou said the house sold for $200,000 above its reserve.
Lack of stock is not as big an issue in Melbourne, where nearly 900 properties went under the hammer, some of them before their scheduled auction.
A boardroom auction was held for a five-bedroom Californian bungalow at 41 Campbell Street in Kew last week.
Four bidders pushed the price of the house $420,000 (35 per cent) above its reserve and it sold for $1.52 million.
Marshall White agent Chris Barrett said the house, on 572 square metres, would likely be demolished for a new home.
Advantage Property buyer advocate Frank Valentic bid on the property for one of his clients, who is looking for a bigger family home.
"The upsizing market is very tough at the moment. People with young families have to move because they're bursting at the seams," Mr Valentic said.