'Like catching a falling knife': Stand-off between wary buyers and hopeful vendors across Sydney auctions

There were tense scenes at auctions across Sydney on Saturday as buyers feared overpaying for properties while vendors were unwilling to budge on reserve prices. 

Some agents found themselves in stand-offs, they said, with bidders and sellers determined to secure the best deal for themselves. One buyer likened the process of negotiating prices in a cooling market to “catching a falling knife”.

There were 681 auctions scheduled across Sydney on Saturday. By evening, Domain Group had recorded a clearance rate of 41 per cent from 326 reported results, up from 40 per cent last weekend.

While the sale of 11 Pine Street in Cammeray drew a healthy crowd of about 25 onlookers, including five registered bidders, only two parties threw their hats in the ring for what turned into a drawn-out auction.

Auctioneer Briannan Davis was met with silence when calling for an opening bid, which is not unusual in the current property market. She put in a vendor’s bid of $3.3 million, the advertised price guide.

An initial $10,000 increment was offered for the four-bedroom property but it was rejected by Ms Davis who declared “we’re still too far away from where we need to be”.

After some negotiation by selling agent Lucy White of Morton Crows Nest, the same buyer put in another bid, this time for $3.35 million.

The second bidder entered the race with a counter offer of $3.4 million before it went up again to $3.45 million, courtesy of the first bidder.

Ms White consulted the vendors soon after and began negotiating with all registered bidders in a bid to sell on the auction floor.

Members of the crowd began filing out as the negotiations dragged on. After 10 long minutes, the hammer fell at the final bid at $3.5 million. It was the first bidder, a local young family looking to upsize, who walked away with the keys. 

The buyers, who did not want their names published, said they had mixed feelings about their purchase, telling Domain they hoped they hadn’t overpaid.

The 556-square-metre block last sold for $1.64 million in 2010. Houses are tightly held in the suburb. Sale numbers were so few in the past year that Domain Group does not have an updated median house price. 

The buyers said the drawn out discussions with the agent during the auction were about the value of the property. “It’s just very hard to firm up value in a falling market — it’s like catching a falling knife.”

Domain understands the initial reserve for the Californian bungalow was $3.6 million but was revised down to $3.55 million before the buyer negotiated it down again to $3.5 million.

The buyer said they didn’t believe it was a fair negotiation process. “I had to bid against myself to get it on the market, which I find highly irregular in any form sense, whether it’s a house or a business.”

Ms White believed the auction went well overall, but conceded it was a lengthy process.

“That’s quite indicative of the current market, where buyers are wary of overpaying. But we definitely got there in the end and I think it was a good price,” she said.

She said encouraging the buyers to bid against themselves had secured the property.

“Without that extra bid he potentially may have not been able to secure it,” said Ms White. 

Ms Davis agreed it was typical of current market conditions. “It did take a little while because we had a vendor who was quite firm on their price, and a buyer who didn’t want to increase a bid against himself,” she said.

A similar scenario unfolded in Sydney’s south where a termite-ridden property, a deceased estate, struggled to sell under the hammer. Eventually the sole registered bidder of the auction also had to bid against themselves to walk away with the keys.

The three-bedroom house on 64 Harris Street in Sans Souci had a price guide and reserve of $1.8 million throughout the campaign.

But selling agent Lisa Sherry of McGrath Sans Souci said many interested buyers were “waiting for it to pass in so they could negotiate”.

A opening vendor bid of $1.6 million started the auction followed by $1,615,000 offered by the sole registered party. It eventually sold for $1,665,000 — $135,000 below reserve.

“[The result is] disappointing and obviously I feel for the owners, the beneficiaries. What it was worth last year is not what it is worth today,” said Ms Sherry.

“It’s a sign of the times, this price may look good in six months’ time if the market keeps declining.”

Domain understands the buyer was from the immediate area.

Meanwhile, 184 Queen St in Ashfield was hotly contested with 11 bidders vying for the keys to the house. 

Bidding started at $1.3 million, going up in increments of $50,000, $20,000 and $10,000 thanks to five active bidders.

The four-bedroom property sold through Brad Gillespie of The Agency Eastern Suburbs to a young local family, who were upsizing, for $1,675,000 – $175,000 above reserve.

The 497 square metre block last sold for $820,000 in 2006. The suburb house median was $1,497,500, a 3.3 per cent increase in the past year.

A two-bedroom terrace on 68 Renwick St in Redfern also sold under the hammer for $905,000 – selling $45,000 above reserve.

Selling Kieran Gianoudis of Ray White Surry Hills said the price point was “appealing to each buyer in the market” with investors and first home buyers all vying for the keys to the house. It last sold for $775,000 in 2014. The suburb’s median is $1.57 million.