Home prices soar as buyers target slim pickings

A Sydney house bought for $3.85 million two years ago sold for $5.15 million on Saturday as strong demand again outstripped measly supply in weekend auctions.

The auction of the four-bedroom home in the non-peninsula section of Hunters Hill set a local record. Nowhere is the supply crunch more apparent than in Sydney, where the volume of properties on the market is down 29 per cent over the 12 months to the end of July.

A lack of stock and the location of 35 Bonnefin Road in the non-peninsula part of Hunters Hill were key factors, with the home selling for $750,000 above reserve.

“It’s a relatively affordable price for that side of Hunters Hill for a waterfront home,” said Savills agent Adam Ross, who sold the house in conjunction with Bresic Whitney’s Nicholas McEvoy. “The bigger prices tend to be pulled on the peninsula. This a record for the non-peninsula side.”

Clearance rates break 80pc

In Sydney, the auction clearance rate hit 81.6 per cent, up from last week’s result of  77.5 per cent, according to CoreLogic figures. And while the number of auctions listed crept up to 610, it is only two-thirds the level it was at this time last year.

“Toward the end of last year the buyers did pull back a bit. Things were not selling. Buyers were saying, ‘this is not sustainable, surely things will soften’,” Mr Ross said. “The reality is, it didn’t soften. People are realising that and so the traction has picked back up again. I will be interested to see how much stock comes to market in spring and whether demand will eat up supply.”

That’s the question on many owners’ minds as they ponder whether to sell in the coming months.

Melbourne strengthens

In Melbourne, the clearance rate was 79.9 per cent this week, up from 74.2 per cent the previous week, with listings there also well down on what they were at this time last year.

Overall, the number of properties on the Melbourne market in the past 12 months is down 13 per cent.

The amount of time properties are spending on market has also increased marginally, which is another factor some owners may have considered, according to CoreLogic’s Kevin Brogan.  

“It may impact in people’s confidence in auctions as a method to get their properties away,” he said.

“To counter that, the current clearance rates we’re seeing would maybe give some encouragement.”

200 bids for Melbourne unit

Among those feeling encouraged in Melbourne is the nonagenarian owner of a villa unit in bayside Brighton, who sold his home for almost $1.27 million. Around 200 bids took the price well past the $850,000 million reserve.

The unrenovated home at 4/23 South Road had three bedrooms, a drawcard for villa buyers.

“Villa units have become one of the most desired properties for both young and old,” said auctioneer Julian Augustini, of Hodges Brighton.

“Both age groups don’t want the maintenance of a big house. Younger buyers don’t want to be tied down to a huge mortgage. 

“The savvy vendor who is in his nineties is extremely happy but his nephew who will inherit the money I suspect is even happier.”

Source: http://www.afr.com/real-estate/home-prices-soar-as-buyers-target-slim-pickings-20160813-gqs06a#ixzz4HO7sDoLt