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Market watchers waiting for market to hit 10-year low

The weekend was the fourth consecutive week where clearance rates were below 50 per cent. Photo: Wilson Agents
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A $5.3 million turreted, beachfront terrace overlooking Port Phillip Bay topped the nation’s weekend auction sales, as clearance rates tumbled across the capital cities.

The most expensive home sold in Melbourne was a four-bedroom terrace house with rooftop turrets at 213 Beaconsfield Parade, Middle Park for $5.3 million, after a $5.1 million opening vendor bid was matched by a bidder.

Two other parties had flagged interest, but chose not to bid. After post-auction negotiations, the sole bidder raised the offer by $200,000.

The beachfront home has a distinct heritage facade with a castle-like top providing the crowning glory to the traditional terrace.

There was only one bidder for the restored Victorian-era residence with a contemporary B.E Architecture update on its 319-square-metre lot.

There had been a $5 million-$5.5 million price guidance for the home once owned in the early 1990s by the IVF pioneer Professor Carl Wood, who had paid $465,000 in 1990.

weekend property wrap October 20
The home sold for $465,000 in 1990. Photo: Wilson Agents

Sydney’s weekend clearance rate dropped to 44 per cent, according to Domain, with Melbourne not faring too much better at 48 per cent.

CoreLogic had Canberra down to 48 per cent and Brisbane at 41 per cent. The deterioration had market watchers anticipate auction clearance rates potentially dipping into the 30s.

SQM’s Louis Christopher noted the past three previous times when Sydney auction clearance rates had sunk into the 30s.

“That was in October/November 2008 during the GFC, May 2004 after the NSW vendor stamp duty was introduced and July 1989, when the cash rate hit 17 per cent.”

Domain chief analyst Nicola Powell told Fairfax Media the east coast auction trend suggested there would not be any improvement over the rest of the year.

Dr Andrew Wilson, at My Housing Market, advised the market had “plunged to new depths” on Saturday in the toughest market conditions since the economic shock of the GFC.

“A rising crisis of confidence is now gripping markets with buyer and seller wariness,” he noted.

CoreLogic calculated there had been increase in auction volumes with 2119 homes taken to auction across the capital cities, up from 1851 over the previous week. But it was still lower than the same time last year when 2519 auctions were listed.

Preliminary CoreLogic results showed a clearance rate of 49.8 per cent across the capital cities, considerably lower than the 64.7 per cent in mid-October last year.

“It marked the fourth consecutive week where the clearance rate has been below 50 per cent,” Kevin Brogan noted.

Melbourne was host to 1088 auctions.

St Clair, a landmark 1934 Eaglemont offering did not sell.

auction wrap october 20
St Clair passed in and is now on the market for $3.9 million. Photo: Nelson Alexander

The lofty 2261-square-metre offering atop Mount Eagle now comes with a $3.9 million asking price through Nelson Alexander agent Gordon Hope, who had initial an $3.8 million-$4 million price guidance. The house at 33-35 Mount Street last sold in 1994 at $620,000.

In the race to auction pre-Melbourne Cup Day, the Real Estate Institute of Victoria is expecting more than 1600 homes on Saturday, including the five apartments in The Block’s Gatwick renovation in St Kilda.

There were 659 auctions held in Sydney at the weekend.

“It is interesting to note that fewer Sydney properties sold prior to auction,” CoreLogic’s Mr Brogan said, reflecting on “the softening market”.

Sydney’s highest sale was 19 Bannockburn Road, Pymble, which sold for $3.35 million. The 1940s house had been extended and renovated over the years into a single-level, four-bedroom, three-bathroom offering.

weekend property wrap October 20
The house was Sydney’s highest sale at $3.35 million. Photo: Di Jones Real Estate

The nation’s cheapest result was $105,000 for a three-bedroom house in Adelaide, according to Domain.

The 6 Redcliff Street, Davoren Park offering was a mortgagee sale.
It had sold at $105,000 in 2007. In 2013 it was a $210-a-week rental.

Adelaide had the nation’s highest weekend clearance rate at 66 per cent, according to CoreLogic.

Jonathan Chancellor is editor at large at Property Observer

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