The value of properties sold at auction has continued to rise into the New Year, with Sydney recording nearly $100 million in sales over the past weekend with just 129 properties on the market.
The sales figures show an average price of over $766,574, which Australian Property Monitors economist Matthew Bell says is a sign the market is beginning to recover with an emphasis on high-end properties.
“If you look at the prices since the start of last year, the median auction prices have continued to rise consistently all the way throughout the year, and that is coming about now as well.”
“There has been a change in what types of property are being sold at auction, as opposed to the actual median prices across the country which are obviously strong as well, but lower. What’s being sold at auction now are more high-end properties.”
Bell says the market is being dominated by the upper suburbs, which have seen remarkable growth during the last quarter.
“These median prices are at historically high levels, and it does indicate that investors are coming back into the market, and it’s a pretty good indication the auction market is going to kick off the year with a strong start.”
But Bell also says the number of first home owners entering the market, including auctions, has continued to remain strong even after the first home owners grant has been phased out.
“I’ve asked some agents, specifically in the eastern suburbs of Sydney and in Marylands, and they have told me the first home buyers market has been going relatively strong. It’s all in units, of course, still very strong and demand is high.”
However, Louis Christopher, head of property research at Advisor Edge, says the market still needs a few more weeks of results to reveal how it could perform over the year.
“You need a few weeks to go by before you can make a clear decision. We’ve just had a good week, and it looks like we’ll have higher volumes next week, so we just need to wait and see.”
Christopher also says the higher average prices at auctions aren’t necessarily unusual, due to the types of properties being sold.
“You get a higher proportion of auctions occurring in the inner urban areas, and so that’s the reason you see a median auction price being quite high. These are primarily free-standing properties as well.”
Sydney recorded 129 sales indicating a clearance rate 71%, with the total value of all properties sold reaching $98 million.
In Melbourne, the city recorded an 85% clearance rate with 233 properties sold at auction, with a total value of $228.9 million. Real Estate Institute of Victoria chief executive Enzo Raimondo said in a statement the result was “very strong”, but indicated a lack of supply in the market.
“This is the strongest result on this weekend in the past five years and highlights the overall lack of supply. Stock levels will increase over the coming weeks – to around 1,000 in a fortnight – however there is a underlying issue with the number of homes on offer for sale.”
“Low stock levels have two impacts, high clearance rates and higher prices as multiple parties compete at auctions.”
In Brisbane, 10 properties were sold indicating a clearance rate of 40%, with the total value reaching $3.4 million. In Adelaide, 20 properties were sold with a clearance rate of 65%, with the total value of sales reaching $10 million.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
