Tale of two cities: Sydney and Melbourne auctions show impact of coronavirus
It was a tale of two cities at the weekend as public auctions continued to burst back to life in Sydney, but Melbourne’s auction market returned with much slower start.
Public auctions have now resumed in each city after a seven-week hiatus, due to the coronavirus pandemic, which has had a dramatic impact on the housing market.
Melbourne, which had just 82 properties scheduled for auction on Saturday, was particularly hard hit, according to the experts. Just over half of the properties were sold on the city’s first weekend back for public auctions, with it recording a preliminary clearance rate of 52.9 per cent from 49 reported results.
In Sydney, where public auctions returned the previous Saturday, there were 149 scheduled auctions – with it recording a preliminary clearance rate of 76.1 per cent from 82 reported results. This was not far off the 180 auctions scheduled for the same weekend last year, when Sydney recorded a clearance rate of 52.8 per cent from 133 reported results.
AMP Capital chief economist Shane Oliver said stricter lockdown conditions in Victoria, coupled with more coronavirus cluster breakouts, seemed to be having a greater impact on public confidence and auctions in Melbourne.
“I suspect Melbourne’s lower results have more to do with the slower easing of restrictions and less optimism that the virus has been beaten,” Dr Oliver said.
He noted while Sydney’s clearance rate was rising it was coming off a lower volume of auctions, particularly when compared with the start of the year.
Dr Oliver said the markets were yet to see what impact rising unemployment, lower household incomes and a halt on immigration would have on the housing market. Rising rental vacancy rates and lower rents were also weighing heavily on investors.
“The one big positive is that interest rates are low and that might encourage people to buy,” he said.
He said if immigration resumed earlier than expected, with proper safety measures in place, this could also help boost market confidence.
Despite the lower numbers of properties for auction, there were some big results across the two cities.
The most expensive sale was for a five-bedroom house with water views at 68 Moruben Road, Mosman. The property sold for $7.5 million after being passed in at auction with Forsyth Real Estate’s Philip Waller the lead agent on the sale.
His colleague Lesley Anton said while there were two dozen people in the crowd, there were only three serious buyers.
“It was not excited, competitive bidding,” Ms Anton said. “There were quite a few buyers’ agents in the crowd, we’ve been noticing more buyers’ agents at auctions now.”
A local family were the highest bidders before the home passed in, and they negotiated the sale price with the vendors over an hour of back and forth.
Two other interested buyers also hung around with the hopes of being able to buy the property if the sale fell through, Ms Anton said.
In Middle Cove, a mid-century modern house at 23 Victoria Avenue sold for $2,283,000.
Forsyth Real Estate’s Ben Forsyth had four registered bidders at the auction, which drew a large crowd of about 50 people who socially distanced outside the property. The property, which last sold for $1,255,000 in 2010, was purchased by a couple looking to downsize.
In the city’s south, a new townhouse sold for $1.28 million at a Saturday auction. The home at 8/101-103 Connells Point Road, South Hurstville, was one of 11 recently developed, townhouses, McGrath San Souci’s Trent Tarbey said. A family snapped up the four-bedroom townhouse, beating four other bidders to secure the keys.
In Melbourne, the auctions that went ahead were allowed a maximum attendance of 10 people as per the new requirements from the Victorian government.
While agents could have on-site auctions, some continued with online streaming, or a mix of both, to allow more house hunters to take part.
This was the case at the auction of a deceased estate at 34 Francesco Street, Bentleigh East, which sold for $1.33 million to a family who plan to knock down the older three-bedroom property and build their dream home.
“We’re finding people are wanting a combination [of online and on-street auctions],” Ray White Oakleigh’s Lee Kelepouris told Domain.
“People on the street can see their competition, while others prefer the privacy aspect of online auctions and getting only genuine buyers,” he said.
Mr Kelepouris said coronavirus had changed property transactions in Melbourne, with online auctions now being offered more frequently.
Although auction volumes were low on Saturday, auctioneers in Melbourne said they were slowly booking auctions in June and July, with sales campaigns starting in the next few weeks.
Marshall White Stonnington director and auctioneer John Bongiorno said the number of listings was slowly increasing.
“We’re really aiming towards having a big June rather than May,” Mr Bongiorno said. “People are starting to trickle back on to the market and there’s still a bit of a wait-and-see attitude.”
Ray White chief auctioneer for Victoria Matt Condon lamented the lack of stock, but said there had been a rise in the number of appraisals in the past two weeks.
“We’re definitely hoping it improves because there’s a lot of potential buyers out there,” Mr Condon said, noting buyer demand was still “high and strong”.
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