Six months makes all the difference: Vendors willing to sell properties before auction as demand softens

A “carbon copy” of it two floors above sold for $1.616 million in March – but a one-bedroom, one-bathroom apartment at 607/87-97 Yarranabbe Road, Darling Point was one of the three properties that failed to sell on Tuesday night. 

Despite a vendor bid of $1.4 million – $216,000 less than what the identical unit sold for – not one interested buyer stuck up their hand.

It’s unlikely it would have been passed in six months ago. Selling agent James Keenan said the sales price achieved in March had been “fairly bullish”; the challenge now was to meet those earlier prices.

Another agent from Sydney’s eastern suburbs, Belle Property, Double Bay principal Albert Sassoon, said the urgency from buyers was dropping off, especially when it came to auctions.

“What people can afford has changed,” he said. “There’s a definitely a slight shift in the market – a lot of stuff is still selling, but selling before auction.”

Mr Sassoon said that there were still a lot of people coming through open homes and taking contracts, but “at the end of the program we’re dealing with one or two bidders, instead of five or eight.”

He added the stock levels were lower than last year, and their strongest market was family homes between $3 million and $6 million. “There’s still a shortage – especially for houses.”

Buyer’s agent Mark Cadry, of Buy East Buyers Agents, said the softening in demand in the past six months was reflected in an increasing number of properties selling before their scheduled auctions.

“Agents are preferring to wrap up the sale, it gives them a lot more certainty. They’re very much more willing to accept a pre-auction offer now.”

But demand has been consistently strong for rundown homes in the eastern suburbs with the option to renovate or knock down.

A long-held two bedroom period home at 7 Bathurst Street, a short walk from Bondi Junction, did sell. In need of a renovation, the home was subject to spirited bidding which pushed it from an initial bid of $1,575,000 up to $2.025 million. 

“It’s amazing what people are paying for knockdowns,” Mr Keenan said.

“That property was unliveable – you cannot, right at the moment, live in it. It needs a new bathroom and kitchen straight away.”

He attributed the interest in the home to its location, and the fact it was freestanding. Houses, or rather the land they are sitting on, have proved appealing of late, with residential land values escalating at a significantly faster rate than building costs.

The home that sold just prior to auction was another relatively run-down house – a 4-bedroom mansion at 31 Newcastle Road, Rose Bay. It’s set on 626 square metres with a 13.5 metre frontage and is zoned medium-density, with a price guide of $4 million to $4.4 million. 

Agent Charlie Mortimer, from Ray White Double Bay, had thought the size of the block combined with the flat surrounds and a short jaunt to the stops might prove appealing, especially to a downsizer.

It had attracted 75 parties, and “quite a lot of interest”, according to Mr Mortimer, who would not comment on the sale price or buyer.

He added that “most people are looking to put their own stamp on it”, although there had been a few interested parties who had wanted to restore the home.

Domain chief economist, Dr Andrew Wilson, said that Sydney is still a reasonable market for sellers.

“The market has eased – it’s no surprise given we haven’t had an interest rate cut [for] over a year now.”

“The eastern suburbs and the lower north have been the top performers,” he said, but added that the clearance rates now were lower than they’d been in autumn.

“In a sense, a lot of buyer demand has been satisfied. There are very big numbers of auctions, or properties, coming through – supply is moving ahead even though demand is weakening.”

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