Sydney buyer smashes auction reserve of Kensington home with $105,000 knock-out bid

When the hammer fell at the auction of a four-bedroom family home in Kensington on Saturday you could have been forgiven for thinking we were back in the boom.

Not only did the property sell for a staggering $430,000 above reserve, the winning bidder also had deep enough pockets to land a $105,000 knock-out bid.

Despite cooling market conditions, buyers were out in force at some of the Sydney homes up for grabs on Saturday.

By evening, Domain had recorded a clearance rate of 48 per cent from 677 reported auctions.

Although there were six registered bidders at the dated federation-era home at 165 Doncaster Avenue, they were slow to show their cards – auctioneer Charlie Daher was met with silence when he called for an opening bid.

But once a bidder — an eastern suburbs investor — eventually piped up with an offer of $1.8 million, it was a matter of seconds before a family from West Pennant Hills hit back with $1.85 million and a bidding war ensued.

The two parties went back and forth in $100,000 and $50,000 jumps, pushing the price of the four-bedroom home well above the $2.1 million reserve.

The 645-square metre block looked set to sell at $2,425,000, when the family offered an extra $105,000 in a knock-out bid that shocked the crowd of 50 watching on.

“Are you sure, sir?” asked Mr Daher. “Yes,” said the buyer, making an offer of $2.53 million on which the hammer fell. The result was $430,000 above reserve.

Kensington’s median house price is $2,748,500.

The bidder, a student at the nearby University of New South Wales who was bidding on behalf of his parents, was delighted with the purchase. The family plan to renovate the home before moving in.

The sale came days after new Domain data showed Sydney house prices had suffered their steepest decline in more than 25 years, with more than $75,000 wiped from the city’s median house price in the past year.

“It’s a very strong result, it bucked the trend,” said Nicholas Efrossynis of Laing+Simmons Kingsford, an agency which has opted to extend its auction campaigns from four to five weeks, due to the cooling market.

“We’ve extended all of our campaigns, as in a quieter market it’s harder to get traction,” Mr Efrossynis said. “You end up going to your vendor at 3.5 weeks with excuses about how buyers can’t get finance.”

With fewer than half of properties scheduled for auction in recent weeks selling under the hammer, Mr Daher said it was clear there was still a disconnect between the price expectations of sellers and buyers.

“If vendors expectations met the market we would have a clearance rate of 65 to 70 per cent, at least,” he said.

Mr Efrossynis noted that while the clearance rate was in decline,  many properties were still selling in the days and weeks after the auction.  “[The clearance rate] is not a measure of success and failure … it is just a measure of how many homes sell within a four-week period.”

It was a sentiment echoed by McGrath auctioneer Adrian Bo, after an auction in nearby Coogee.

“For private treaties the clearance rate would probably only be about 20 per cent, if you were also looking at whether properties sold within 30 days,” Mr Bo added.

“To have about one out of every two properties [going to auction] still selling within 30 days, even within what’s seen as a tougher market, I think is still very good.”

At his Coogee auction for 87 Mount Street, only one of two registered bidders took part, kicking off the auction with a bid of $1.9 million.

Mr Bo hit back with a vendor bid of $2.15 million, which the bidder topped by $10,000, before revising his offer up to the reserve price of $2.2 million, after several minutes of negotiation.

The three-bedroom semi sold for more than triple the $700,000 it last traded for in 1999. It was bought by a local couple upsizing from an apartment.

The city and eastern suburbs were the only areas where prices didn’t fall in the year to September, recording 1.1 per cent median house price growth, in contrast to Sydney’s 6.5 per cent fall. Mr Bo attributed this to the limited supply of new housing in the area.

Selling agent Nick Simitzis of McGrath Coogee said while vendors were now getting less for their homes than they would have last year, they were also buying new properties for less.

Elsewhere in Sydney:

SOLD $2.8 million
Mosman
24 Calypso AvenueA bidding war at the auction of a four-bedroom family home in Kensington on Saturday, saw the property sell for $430,000 above reserve.
3 bedrooms, 1 bathroom, 1 car space

Seventeen bidders turned out to compete for this deceased estate, on the market for the first time in more than 44 years. Bidding opened at $1.8 million and went up in $50,000 increments to $2.5 million, after which it slowed to smaller jumps. Seven of the bidders had made offers by the time the hammer fell, pushing the price $550,000 above reserve. It sold through David Buttel of Raine & Horne Neutral Bay to a local buyer, who plans to renovate the property.

PASSED IN
Cabarita
​7 Moore Street
3 bedrooms, 1 bathroom, 1 car space

Three buyers turned out to the auction of this tightly held home, but not one of them bid on the 550-square metre block. However they were certainly interested, with all three negotiating with Ben Horwood of LJ Hooker Drummoyne/Concord post auction. He was confident the home, with a price guide of $2 million to 2.2 million, would sell in the coming days. “It’s their turn now, we’ve had five years of it,” he said of buyers now having the upper hand.

PASSED IN $1.5 million
Pyrmont
​1804/8 Distillery Drive
2 bedrooms, 2 bathrooms, 2 car spaces

They had no competition, but still the one bidder at the auction of this 147-square metre apartment came away empty handed. The buyer made an offer of $1.3 million, well below the guide of $1.6 to $1.7 million. While this was increased to $1.5 million, it wasn’t enough to secure the keys and the property was passed in. Selling agent Ian Qiu of Morton Pyrmont expected the unit to sell in coming weeks. It last sold for $1,285,000 in 2014.

SOLD $2 million
Rozelle
1 Napoleon Street
4 bedrooms, 2 bathrooms, 0 car spaces

About 90 groups inspected this lovely family home but come auction day the competition came down to three buyers. Bidding started at $1.9 million and climbed in $10,000 increments, slowing down to $2500 jumps before the hammer fell on the $2 million reserve. It sold through Cindy Kennedy of McGrath Balmain to a young local family. The vendor, who bought the property back in 1995 for $320,000, is looking to downsize in the area.