Weekend auction clearance rates remained strong, sitting about 70 per cent in both Sydney and Melbourne, underpinned by last week’s interest rate announcement.
The RBA board lowered the cost of borrowing – with most lending institutions passing it on to home buyers – and the federal budget put property investment firmly on the agenda as a byproduct to its mooted superannuation changes.
Home loan rates are as low as 3.88 per cent for owner-occupiers and 4.04 per cent for investors compared with a long-term average of about 7 per cent.
Not that the money is free flowing as with stricter loan-to-value ratios (LVRs) being applied by lenders, the capacity of both local and offshore buyers for houses and apartments is being curtailed.
Dr Andrew Wilson, chief economist for Domain Group, says Sydney price growth this year was likely to be around three and four per cent and Melbourne slightly higher at between four and five per cent.
Toorak ought have secured the weekend’s top two sales but the interest was not there, with the Chinese influence now just an undercurrent.
There were no bidders when 23 Montalto Avenue, Toorak was offered. The vendor bid was $7.75 million for the Rodney Alsop-designed family residence on 1146 sqm with pool and courtyard designed by gardening guru Edna Walling.
Another Toorak offering at 10 Cole Court was passed in on a $6.75 million vendor bid through RT Edgar after rejecting the only buyer bid of $5 million.
The home was converted in the 1950s by Sir Roy Grounds out of stables for the now razed Southdean estate.
It was offered by the Cecil family, the fourth-generation owners of menswear retailer Henry Bucks.
Melbourne buyers agent Mal James said the market was missing the Chinese buying interest at prior levels.
He advised that any claims by agents that “we’ve got loads of Chinese interest from overseas” was now “drivel”.
“It’s not there like it was in most cases,” he said.
So the top weekend sale price was instead $4.55 million at Henley in Sydney on the riverfront when 6 Sherwin Street sold through Ray White, who suggested it needed renovation.
It narrowly exceeded the $4.5 million sale of 389 Barkly Street, Elwood. There were five bidders for the investment opportunity of a block of four, three-bedroom apartments.
The cheapest result was $250,000 in Adelaide, at just above the $239,000 price guidance.
It was a deceased estate on Beach Road which had been a recent $300-a-week four-bedroom rental with mechanic’s garaging.
There was a $277,500 sale in Melbourne’s Tullamarine, but with little price growth over the five years since sold at $275,000.
It too sold at just above its $250,000 to $275,000 price range.
The single storey one-bedroom 1980s villa with courtyard is rented at $265 a week, which also reflected little if any rental price growth over the five-year ownership.
This week there were 1135 auctions in Melbourne, which accounted for 52 per cent of all capital city auctions.
CoreLogic RP Data advised the 71 per cent Melbourne clearance rate compared to 73 per cent last week and 79 per cent one year ago.
Sunshine cracked the $1 million club after a period-style family home sold under the hammer for a record-breaking $1.03 million.
It was the four-bedroom house at 1 Walter St, located on 810 sqm in the coveted Matthews Hill precinct that bettered the $935,000 record set in February this year.
In Carlton, former AFL coach Denis Pagan’s longtime family home sold with approval for three townhouses at $1.8 million.
Co-owned with brother Larry, it had been mostly empty for the past decade.
Melbourne’s inner east was the softest clearance rate at 63 per cent across 135 results collected.
By contrast, Sydney’s east was super strong. Sydney hosted 647 auctions this week with a preliminary clearance rate of 72 per cent, sitting as the strongest of any capital city with three Sydney sub-regions recording success rates in the 80 per cent range, including its eastern suburbs at 89 per cent.
Anyone doubting the strength can’t view the latest celebrity listing as it sold within six days of offering and weeks before its scheduled auction.
It was a Bondi semi that performed poorly in The Block All Stars three years ago.
It has now been snapped up for around $2.55 million, an 86 per cent hike on the sale price under the television lights in 2013.
Sunnybrae at 10 Tasman Street, Bondi, had an initial price guide of $2.2 million, having sold last at $1,375,000.
After two long weekends in a row, Brisbane auction volumes picked up this week, with 192 residential properties going under the hammer, with just 43 per cent selling.
Canberra had their mind on other matters with the 54 per cent clearance rate down from 59 per cent last week and 65 per cent last year.
Jonathan Chancellor is editor-at-large at Property Observer.