Sydney and Melbourne auctions: Buyers and sellers fight a tug-o-war over price expectations
Home buyers and sellers fought a tug-o-war at painstaking online auctions on Saturday as price expectations from both sides diverged.
There were just 211 properties scheduled for auction in Sydney on Saturday and while there were many vendors with unrealistic expectations in the current market, there were also reluctant or bargain-hunting buyers.
By evening, Domain Group had recorded a 49.7 per cent Sydney clearance rate from 112 reported results and 61 withdrawn properties.
In Melbourne, there were 151 auctions scheduled, five weeks after public auctions were banned and sellers faced the choice of a virtual auction or private sale.
Domain Group had recorded a 33.3 per cent Melbourne clearance rate from 53 reported results and 64 withdrawn properties by the end of the day.
The number of withdrawn homes has been unusually high in recent weeks due to the public auction ban, although it eased noticeably on Saturday. As homes withdrawn from auction are counted as unsold — even if they are listed for private sale — this pulls down the clearance rate.
There was plenty of interest in a two-bedroom house at 98 Wells Street, Newtown during the auction campaign but only two people ended up throwing their hats in the ring on the big day.
An opening bid of $1.2 million – bang on the price guide – kicked off the virtual sell-off, rising in varying increments for just 12 bids.
The auction stalled at $1,273,000 before a vendor bid of $1.3 million was placed. A final $1000 bid was offered but was not enough to satisfy the vendor and the property was passed in.
Ray White Surry Hills, Alexandria & Glebe selling agent Moira Verheijen said the property sold in post-auction negotiations to first-home buyers for $1.33 million.
“It was a matter of [the vendor] coming to terms with where the market was sitting. It was probably a 5 per cent hit of what her expectation was,” she said.
In Beacon Hill, three parties vied for the keys to a renovated three-bedroom house at 18A Government Road in a marathon 75-minute-long auction.
An opening offer of $1.1 million started proceedings but only 11 more bids were placed during the marathon sell-off.
In an attempt to stoke interest at the outset, McGrath auctioneer Edward Riley told viewers that the Prime Minister suggested on Friday restrictions could be restricted by the end of next week.
“If you’re waiting for the bottom of the market, that may have already passed,” he said. “Strike while the iron is hot before you miss out again.”
The auction was paused multiple times to take instructions from the vendors and solve “technical issues and make sure there are no further bids” as it became increasingly unclear whether the property was on the market or not.
But after an hour and a quarter of bidding and much negotiation with the vendors and buyers, the property finally sold for $1,235,000 under the hammer.
Meanwhile, a three-bedroom house at 48 Acton Street, Hurlstone Park offered for the first time in more than 65 years drew strong interest with seven registered buyers.
Bidding kicked off at $1.25 million and climbed in $25,000 increments.
Competition from four active buyers for the tightly-held Federation home saw the price rise well above the $1.38 million reserve.
The hammer fell at $1.51 million, selling to a young, local family who were upsizing.
Ray White Petersham selling agent Nicholas Arena said it was a property with lots of potential.
“Some vendors might be finding it a bit tough. But if you have a motivated vendor and motivated buyer, you will sell.”
In Melbourne, buyers’ and sellers expectations’ were also mismatched with vendor bids placed to get sell-offs started and interested parties reluctant to raise the price.
In Balwyn North, a five-bedroom house at 7 Citron Avenue saw five buyers register for the online auction.
Only one party threw their hat in the ring after an opening vendor bid of $1.4 million – the bottom of the initial price guide.
The sole active bidder increased the price by $10,000 before the property was passed in at $1.41 million.
The property sold in post-auction negotiations for $1.42 million – below the $1.5 million reserve – to an Australian in the UK.
McGrath Box Hill’s Adrian Stefanetti said many buyers were scared off from bidding.
“Things are fluctuating daily. It’s hard to predict what’s going to happen,” Mr Stefanetti said, adding that the vendors were aware of the current market and happy to sell within the range of their price guide of $1.4 million to $1.5 million.
Meanwhile, a four-bedroom house in 61 Rathmullen Road, Boronia passed in on a vendor bid of $700,000 after a keen potential buyer pulled out.
The family home with a roomy backyard was listed with a price guide of $690,000 to $750,000.
A genuine opening offer of $600,000 kicked off proceedings, then Ray White auctioneer Jeremy Tyrrell followed it with a vendor bid of $650,000 to edge the price closer to the bottom of the quoted range.
“Try to find something that is a four-bedroom home at this price level – impossible,” Mr Tyrrell said to the crowd watching on their screens.
After a pause, another vendor bid was placed at $700,000, with an appeal for another offer of only $1000 more which would give its bidder the right to negotiate exclusively with the seller after the auction.
But with no more bids forthcoming, the property passed in.
Later that afternoon there had been a couple of post-auction offers, listing agent John Arroyo of Ray White Ferntree Gully said.
“It was tough,” he said of the auction. “We had one of the strongest bidders pull out one hour before the auction.
“That really put a spanner in the works.”
Interest was coming from first-home buyers and families, however, and Mr Arroyo said he was confident of a deal in the next week.
He said sentiment had changed from the end of March to the end of April, with more inspections happening, although prices had dropped about 5 per cent in the local area and some vendors still holding on for “pre-corona prices”.
“Most [sellers] come down,” he said. “Some buyers come up.”
With Elizabeth Redman
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