Vendor price expectations are starting to exceed reality after a year of surging price rises, but demand remains deep with 82 per cent of the 101 Gold Coast properties auctioned by Ray White as part of ‘The Event – 2022’ on Sunday selling.
Andrew Bell, chief executive of Ray White Surfers Paradise, said the phenomenon happens toward the back end of every cycle and is a sign that price growth is moderating.
“It’s not unusual,” he said.
“All of last year we were getting significantly higher prices than sellers expected. But we’re now getting people who have got a place that is worth $1 million and they want $1.2 million or $1.3 million.
“Their ambitions on price have grown because of everything they’ve read about the real estate market. The publicity is enticing people into the market who would only sell if they got a remarkable price.
“And a lot of those people are finding that the market won’t pay their price.
“That’s usually a development that happens as you get towards that stage in the market where all of the want-to-sells and have-to-sells have sold, and you start to see more of those who want an incredible price.
“And it’s just starting to surface now. So the message to those people is that ‘the market won’t pay whatever you want, it’s paying exceptionally good prices, you just have to come to terms with that price’.
“It indicates price growth is perhaps moderating.”
Certainly, that’s Mr Bell’s prediction after a year when median house prices on the Gold Coast rose 35 per cent and are tipped to exceed $1 million by the end of March.
“I don’t expect the same price growth, that’s for sure,” Mr Bell said. “You can’t keep getting 30 to 40 per cent growth year in and year out ad infinitum.
“You get two years of strong price growth, you go through the history books and that’s usually as good as you get, then you get the ease off factor.”
He expects the looming federal election in May and forecast interest rate rises later this year will inhibit further growth.
AMP has brought forward its timing on interest rate rises, forecasting the Reserve Bank will lift the cash rate by 0.4 per cent to 0.5 per cent by September due to strong jobs growth.
“Market expectations for four or five RBA hikes this year are too hawkish though,” said Shane Oliver, head of investment strategy and chief economist at AMP.
Mr Bell said there were 637 registered bidders on Sunday, 54 per cent of them Gold Coast locals and 46 per cent from interstate fighting it out for a mix of residential and commercial properties.
The auction has so far grossed more than $68 million – some deals are yet to close– and featured strong bidding on many properties with a majority sold for more than reserve, he said.
The cheapest buy was a Surfers Paradise apartment at $336,000. The most expensive was an equine complex in the Gold Coast hinterland which sold for $5.95 million.
The Event culminates on Friday night when more than 20 luxury residential properties are taken to auction. Mr Bell is confident takings from the combined auctions will exceed last year’s total of $133 million when 109 properties were sold.
Article Source: www.afr.com