Canberra auctions: Finance a barrier as Macquarie house passes in at $680,000 but sells after

A Macquarie house sold after auction yesterday after failing to achieve a result under the hammer. Despite recent interest rate cuts and the regulator relaxing lending criteria, agents say financing continues to be a barrier at auctions.

The property at 11 Arndell Street passed in at $680,000, with a crowd of about 25 gathering on the chilly morning. A three-bedroom house sits on the RZ2-zoned, 746-square-metre block.

There were three bidders in attendance, but Ray White Canberra listing agent Peter Walker said there was interest from parties with conditional offers.

“We did have a lot more interest than three bidders, but a lot of people turned up and said they couldn’t get their finance across the line in time and that they would like to make conditional offers, so whether that’s legitimate or not remains to be seen,” he said.

The first bid of $580,000, from a phone bidder, came quickly after proceedings began. Within a few minutes, the opening bidder then made a rise against himself, upping the price to $600,000.

This spurred on another phone bidder, who countered with a bid for $620,000. A $10,000 reply followed, and then two bids at $15,000 increments, which took the price to $660,000.

At this point, bidding halted, with one of the bidders bowing out of the action. Mr Walker then started negotiations between the sellers and the bidder.

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After about five minutes, the bidder made a $15,000 increase, but it was not enough to get the sale over the line and so further discussions took place. The shivering crowd was told the price was “excruciatingly close” by auctioneer Alec Brown, also of Ray White Canberra.

Another five minutes passed, and the bidder made a further rise, taking the price to $680,000. However, with no forthcoming bids from the other parties, the house passed in. It sold later in the day for an undisclosed price.

“I think social proof is important with an auction and with the absence of other people bidding it’s probably quelled some of the enthusiasm a bit,” Mr Walker said after the auction.

While financing is a factor, Mr Walker said, buyers also feel they have more opportunity.

“People’s ability to bid is important … [but] people don’t feel a sense of loss or anything like that at the moment; they feel other opportunities are coming up,” he said.

At the time of publication, Mr Brown said negotiations were taking place for the property and there was “not a lot in it”.

Elsewhere, a six-bedroom property in Spence sold under the hammer for $819,200. There was a tight competition between two bidders for the house at 31 Sommerville Street, according to Mr Brown, who also auctioned this property.

Bidding started at $680,000, with increments starting at $20,000 and then drastically shortening to $200 bids.

“Everything was thrown at it between the two bidders. It was a very well presented home with beautiful renovations,” Mr Brown said, “[but] finance got in the way of a few other buyers.

“We are still experiencing the value of being prepared – it’s worth doing the due diligence early.” 

This article has been updated since it was first published.