"We've all forgotten what a normal market is" agent says on cooling auction clearance rates
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Nov 26, 2018
"We've all forgotten what a normal market is" agent says on cooling auction clearance rates
A Drummoyne home has defied market trends, skyrocketing $650k above the reserve price, while Place Bulimba held another successful All-Star Auction event.
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Ray White DrummoynePictured: 53 Dening Street, Drummoyne sold for $5.8m under the hammer by Chris Wilkins of Ray White Drummoyne.
Melbourne and Sydney have now entered their third month of auction clearance rates stalling at the 40 per cent level, according to CoreLogic data.
Last week's final auction clearance rates cement the trend, with only 42 per cent of homes successful at auction - the lowest result seen since June 2012.
But a contemporary Drummoyne home has defied the market trends, skyrocketing $650,000 above the reserve on Saturday before selling at auction for $5.8 million.
The four-bedroom home with its own putting green drew five registered bidders and a crowd of well over 100.
Listing agent Chris Wilkins of Ray White Drummoyne was "very surprised" at the result, with strong bidding increasing in $100k increments.
When Chris Wilkins first listed the property for auction, he knew it deserved a worldwide pool of potential buyers. So he took out an advertisement in the New York Times Asia edition, which garnered strong inquiry from Singapore and Hong Kong, over 18,000 online views, and more than 135 groups through for an inspection.
Related reading: Drummoyne home attracts global interest
Mr Wilkins says clearance rates are not a reflection of the market.
"I think that as soon as people stop talking about clearance rates being a reflection of the market the better, because they're not. We've all forgotten what a normal market is. A normal market is 40 to 50 per cent (clearance rate)," he told WILLIAMS MEDIA.
"Another thing is clearance rates are also being affected by buyers who are bidding and owners saying the price isn't high enough because they believe their home is worth more than what it actually is.
"My confidence is still in the market. It's Sydney - good areas here will always sell."
Mr Wilkins told WILLIAMS MEDIA the combination of a weaker Aussie dollar and a cooling of the property market offers up interesting potential to foreign investors and expats.
"International buyers considering Sydney property now have a more attractive set of circumstances on their hands. With the steam coming out of the market, particularly at the prestige end of the spectrum, it effectively doubles down on their potential to buy well," he said.
Pictured: A LinkedIn comment in response to our previous article on 53 Dening Street, Drummoyne. Image via LinkedIn.
"There is everything to be gained from tapping into these markets by utilising publications like the New York Times. Particularly with a property with such a unique feature as a nine-hole putting green, we put ourselves in the shoes of a potential buyer and wondered who this might be attractive to, and the opportunity to showcase it beyond Australia was very compelling,” Mr Wilkins told WILLIAMS MEDIA.
A firm believer in the power of tapping into the expat market, Mr Wilkins has observed expats' wealth spreading beyond the traditional trophy homes of Sydney’s Eastern Suburbs and Lower North Shore to premium properties in suburbs like the Inner West.
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Brisbane
After more than $20 million worth of property changed hands at their last event, Place Bulimba held their second All-Star Auction last week.
Place Bulimba principal Paul Curtain says 80 per cent of properties are expected to be under contract come Christmas Eve.
"We had a very similar outcome on the night of the auction as we did at our last event. Over the following eight weeks since the previous event, all but three of those properties have sold, and we're expecting a similar pattern here, with negotiations to close down on those properties by Christmas Eve," Mr Curtain told WILLIAMS MEDIA.
With well over 100 people in attendance, Mr Curtain says the atmosphere was good.
"Three properties cleared on the night, some sold directly after."
The most expensive property sold was in Waldo Street, Norman Park.
Mr Curtain says that the Brisbane auction market has always been a different beast.
Related reading: Millions of dollars of properties set to change hands at Place Bulimba's upcoming All-Star Auction
"Brisbane auctions have always been different even in a hot market compared to Sydney and Melbourne.
"We want to show our vendors that while selling on the night is always everyone's first preference because it's an unconditional sale, we can statistically show that even if you don't sell on the night, you have a high likelihood of selling in the four to eight week time period after
"If you assessed our All-Star Auction events by what sold on the night then people could take one view, but if you assess the clearance rate from the first auction event, you can see it's a very productive way of processing property over an eight week period of time.
"As markets have cooled, as a seller you're looking for more of a rationale to understand what to do with your property rather than just the day of auction," Mr Curtain told WILLIAMS MEDIA.
Melbourne
Meanwhile, Melbourne drew a preliminary clearance rate of 48 per cent, according to CoreLogic data.
But a house in Maribyrnong broke the suburb record, selling for $4.1 million, the highest price ever fetched for a house in the suburb, according to Real Estate Insitute of Victoria (REIV) President Gil King.
“Three suburbs - Epping, Mount Waverley, Reservoir - led the market with seven sales each," Mr King told WILLIAMS MEDIA.
Related reading:
Brisbane apartments now $100k more expensive
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