In an intriguing turn of events, Sydney’s auction scene has been electrified by recent interest rate rises. An unexpected flurry of activity has been triggered, with home seekers eager to secure properties before banks withdraw their loan approval.
Despite the long weekend leading to a decrease in the number of properties listed, the past week saw more than 400 properties scheduled for auction. Preliminary indicators have shown that a significant portion of these auctions were successful. This unexpected surge in activity seems to contradict conventional wisdom, which suggests that increased interest rates would dampen enthusiasm in the property market.
Interestingly, the fiercest competition was witnessed at auctions of properties considered “entry level” in their suburbs. However, there was also a robust demand for premium properties, underscoring the healthy demand across all property types.
In the eastern suburbs, for example, a seller in Coogee realized a profit of $430,000 more than the previous year’s purchase price, after a modest $30,000 renovation. The property was sold at auction for $2.88m, which was $80,000 over the reserve price. The winning bidder was a developer planning a significant rebuild project.
The inner west also saw intense action. A three-bedroom house in Marrickville was sold for $2.525m, nearly $200,000 above the reserve price. The auction had been moved forward by a week due to strong demand, with a staggering 128 groups shown through in just over two weeks. According to the agent, the property was highly sought after due to a scarcity of quality listings in the area.
The north, west, and south of Sydney also partook in the auction frenzy. In East Lindfield, a luxury home sold for $5.4 million, $80,000 above the reserve price. Quakers Hill saw a house fetch $1.67m, $40,000 above the reserve price, mostly from buyers who were priced out of surrounding suburbs. Meanwhile, a three-bedroom house in Bonnet Bay sold for $1.5m, a solid $100,000 above the reserve price.
Despite the current climate of rising interest rates, clearance rates for Sydney auctions have held steady at around 65-70% in recent weeks. This series of events is a testament to the resilience of Sydney’s property market in the face of changing economic conditions. Whether you’re a first-time homebuyer, investor, or just an interested observer, one thing is clear – Sydney’s auction scene is more thrilling than ever.
Source: Sydney auctions: Interest rate rises fire up bidder activity – realestate.com.au