A historic Edwardian home in Moonee Ponds sold for $1.54 million on Saturday after first passing in at auction, with buyers more cautious in their bidding following the second interest rate hike in two months.
The three-bedroom home at 58 Holmes Road attracted just two bids – an opening vendor bid of $1.5 million and a follow-up offer of $1.52 million from a local buyer, who was away for the Queen’s Birthday long weekend, and bid online from interstate.
It sold midway between the asking price range of $1.5 million to $1.58 million, on the first weekend since interest rates were hiked another 0.5 per cent by the Reserve Bank of Australia.
Nelson Alexander Flemington partner and auctioneer Jayson Watts said while the interest rate rises had sent jitters through the market, buyers had been expecting rates to go up, and were still willing to make an offer.
“We’ve gone from the best market I’ve seen in 20 years, with record low-interest rates to a more normal, balanced market where interest rates are returning to normal,” Watts said. “It means buyers are making more sensible decisions rather than getting that rush of blood when bidding.”
Around suburbs like Moonee Ponds and Flemington, buyers were more concerned about the rising cost of construction and building materials needed to fix up homes that needed renovation, he said.
“Buyers definitely prefer to buy something where the work is already done,” Watts said. “There’s a really big appetite for renovated homes, or newly-built homes, where they don’t have to do any work.”
The sale was one of 347 scheduled auctions on Saturday, fewer than usually seen, as agents and vendors avoided selling on the long weekend. By evening, Domain Group recorded a preliminary clearance rate of 57.9 per cent from 228 reported results, while 41 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.
It was the second Saturday in a row with a preliminary clearance rate below 60 per cent, which is a level that broadly correlates with a balanced market. When the rate tracks below 60 per cent, prices are likely to be falling.
One of the biggest results for the long weekend was on the Mornington Peninsula, where a four-bedroom home sold under the hammer for $4.55 million, $1.05 million above the reserve.
Three bidders competed for the property at 69 Bass Street, Flinders, which backs onto the Flinders Golf Course.
The auction opened with a vendor bid at the $3.5 million reserve price, which was followed by strong bidding, said Kay & Burton Flinders selling agent Ruth Williams.
“It was a hotly contested ripper auction with three keen bidders and 120 people in attendance,” Williams said. “The buyer is a keen surfer and will enjoy the property as a weekend holiday house with his family looking out over Mushroom Reef.”
Williams said though buyers were being more cautious at auctions, there were still good results for unique, lifestyle homes along the peninsula, which had helped “insulate” the area during downturns in the past.
Closer to the city, but still on the coast, a three-bedroom 1950s style home at 1/31 Munro Avenue, Edithvale, passed in before selling for $930,000. It had a price guide of $899,000 to $970,000.
Bidding opened at $880,000, with offers stalling at $920,000. The property passed in on a vendor bid of $930,000, which the ultimate buyers, a local family, matched post auction.
O’Brien Real Estate Chelsea selling agent Kimberley Ferguson said more buyers had been holding back as the market changed.
“There are a few people that are wanting to be a little more cautious,” Ferguson said. “But there’s a lot of people that need to buy, they’re about to have a family, or they’ve separated, or they have pre-approval and want to get in while they can.”
Though rising construction costs are deterring many buyers, not all are standing back. A deceased estate in Blackburn North was snapped up by a developer for $1.29 million – $130,000 above the reserve.
Ray White Blackburn auctioneer Allan Smith said six active bidders competed, with the buyer of the four-bedroom house at 67 Koonung Road, planning to tear it down and subdivide the block.
“We are in ‘a correcting market’ and no-one knows what the future holds, but there’s no drastic reductions in price going on,” Smith said.
In Abbotsford, a three-bedroom house which had been an investment property, sold under the hammer for $1.31 million, above the $1.21 million reserve. Two bidders competed for the home at 20 Yarra Street, Abbotsford, with a local family purchasing the home.
Bidding opened on a vendor bid of $1 million, as buyers kept their cards close to their chest, but a follow-up $50,000 offer then sparked competition.
Jellis Craig Richmond selling agent Luke Schickerling said the auction was “really good” despite what was happening in the market.
“If people want to buy, they’ll buy, especially while money is still available,” Schickerling said.
Article source: www.brisbanetimes.com.au