Home buyers buoyed by the Reserve Bank’s decision to slash official interest rates to historic lows have driven the national auction market close to an annual record as they cast off fears that prices are overblown and jump in to secure attractive loans.
More than three-quarters of the 1500 homes up for auction around the nation last week sold under the hammer, with Melbourne leading the auction market activity and Sydney recording unseasonably high clearance rates.
In Melbourne, more than 76 per cent of the 722 homes put up for auction changed hands, while Sydney recorded a clearance rate of 80.4 per cent of the 526 homes up for sale.
Buyers in Canberra, Brisbane and Adelaide also seized upon homes up for auction in the week after the RBA shaved 25 basis points off the cash rate, with Brisbane and Adelaide recording sales at about two-thirds of auctions on the weekend.
Prospective buyers throughout Melbourne and Sydney told agents they were done sitting on the sidelines gauging where the market was headed, and that it was “now or never” if they wanted to upgrade or buy their first home.
“People are realising that it’s the most affordable time to try and upgrade and they’re pushing themselves further than they usually would have,” McGrath agent Peter Chauncy told The Australian.
“For people who backed away at the end of last year, there’s now a sense they’ve got to get back in.”
Economists were uncertain last week whether the RBA’s decision to drop the cash rate to 1.5 per cent would stoke activity on the housing market, particularly after a number of big banks refused to pass on the full cut to borrowers.
But agents including Mr Chauncy say newly invigorated buyers are turning up. The agent set a new record for Naremburn on Sydney’s north shore last week, selling a four-bedroom Federation cottage to a young family for more than $3.4 million, and has expectations that an unprecedented dearth of homes on the market means prices will continue to rise.
“It’s not uncommon to get 40 or 50 people through an open home on the weekend,” Mr Chauncy said. “I haven’t seen conditions like this for 15 years.”
Other homes around the country to sell at packed auctions include a modern five-bedroom home with a resort-style swimming pool and outdoor entertaining area in Castle Hill, in Sydney’s northwest, which went for $2.19m. The family home on 1045sq m was last listed as a vacant parcel in September 2013, for $805,000.
In Indooroopilly, in Brisbane’s west, a newly built four-bedroom home with sleek interiors, a resort-style swimming pool and backyard sold for $1.352m at auction, after selling in 2009 for $960,000.
At Palm Beach, on the Gold Coast, a rundown bungalow on a 736sq m block near the beach at 77 Twenty Fifth Avenue sold for $760,000.
In Melbourne, a two-bedroom apartment in an architectural complex at 2/312 Dandenong Road, St Kilda, changed hands for $631,500.
Demand for weekenders and holiday homes is also on the rise in the wake of the latest interest rate drop, agents said.
Savills agent Adam Ross spent the weekend in the NSW Southern Highlands showing groups through a sprawling Cape Cod-inspired weekender at Bundanoon known as Eight Oaks, which is surrounded by formal, manicured gardens.
“There were a lot of people who got to the end of last year and decided to take a step back for 12 months and see what happens, because things were going so crazy,” Mr Ross said. “But they’ve got six months on and realised that prices aren’t softening and the activity is still there and there’s no point waiting any longer.”
Original article published at www.theaustralian.com.au by SAMANTHA HUTCHINSON 08/8/16