Soaring November auction volumes favouring buyers!
As 2014 draws to a close, there is little doubt that this year will go down in history as one of Sydney’s strongest property markets, with another phenomenal spike in house prices.
Before I provide a summary of how the month of November faired, let’s look at the highlights for 2014.
Coming off the back of a very strong November/December 2013, buyer confidence was high leading into January/February 2014. With such low interest rates, it was always going to be a strong start to the year.
The energy among buyers was particularly evident leading into the Easter weekend period, preceded by three consecutive weekends of record auction numbers nationally. Sydney was particularly strong with more than 1,000 auctions per weekend and a clearance rate consistently around 80%.
After a very strong Easter, there was a two week lull due to the holidays and the Anzac Day long weekend, with buyers obviously frustrated by the lack of quality stock. More listings came onto the market in May, June and July and while the volume of sales was high, the market eased slightly.
Leading into Spring, the usual rush of properties was certainly delayed until October but once the season was properly underway, the market performed exceedingly well. Sydney was strongest with clearance rates consistently around 80%.
The 2014 market will end a remarkable year of real estate nationally, however there is no doubt the market has cooled slightly due to the surge in stock in October and particularly November; as well as the inevitable impact of another strong year of price growth giving buyers pause for thought.
November summary
Auction clearance rates nationally were at 68%. Sydney led the way with an average of 72%, well below the October average of 80%. Adelaide was second highest at 68%, pipping Melbourne at 67%.
Auction Services recorded a clearance rate of 76% in November.
Auction Services Directors, Rocky Bartolotto and Scott Dalton say strong results are still being achieved but the market has now shifted to favour buyers, with competition spread a little more thinly across a significant amount of new stock. As a result, vendors should consider this on auction day if their reserve price is not met.
Truly remarkable results continue to surprise, with the best one this month from Joe Bechara of LJ Hooker Granville and Auction Services Director and Auctioneer, Rob Trovato delivering a sale that was $1.208 million over reserve! The property, at 32 South Street, Granville, sold for $2.608 million.
Outlook for 2015
Interest rates remaining low will be a key indicator. The RBA left rates on hold at its last meeting for the year, making this period of unchanged rates the longest since the mid-1990s. Should interest rates remain the same, we should see a steady market in 2015. If they move either way, we could see dramatic change. An interest rate increase will see the market slow as buyers panic and wait to see if further rises are to come. An interest rate drop could result in another spike in property prices due to ongoing high demand. Any way you look at it, 2015 will keep everyone guessing on where to position themselves.
This month our spotlight region is South West Sydney, where Raine & Horne Cabramatta Sales Manager Peter Ly reports strong sales in November, particularly in Cabramatta, Canley Heights and Canley Vale. Local listing volumes have been quite consistent in relation to buyer demand, he says.
There is no sign of the local market slowing down, with buyer confidence and strong sale prices right through the second half of the year. This includes 32 Fifth Avenue, Canley Vale – a dilapidated cladded cottage with a rundown granny flat that sold for a record price of $763,000 at auction. This was $113,000 over reserve due to competition from eight registered bidders. The buyer is a local investor who saw plenty of potential to improve the property.
Growth in the area has also been quite strong with apartments in Cabramatta achieving a 10-15% increase since January. House price growth is slightly higher at 15-20%. Homes in hot locations close to Cabramatta and Canley Heights CBDs have tended to achieve better results and capital gains.
November auction highlights
• 4 Darwin Street, West Ryde sold for $1,158,000 – $158,000 over reserve by First National West Ryde
• 6 Linden Grove, Ermington sold for $1,203,000 – $153,000 over reserve by First National West Ryde
• 231 Evans Street, Rozelle sold for $1,500,000 – $100,000 over reserve by Belle Property Balmain
• 12 John Street, Ashfield sold for $1,122,000 – $142,000 over reserve by LJ Hooker Ashfield
• 4 Daphne Street, West Ryde sold for $1,430,000 – $100,000 over reserve by Green Real Estate Agency
• 86 The Trongate, Granville sold for $980,000 – $90,000 over reserve by LJ Hooker Granville
• 12 Richmond Street, Denistone East sold for $1,400,000 – $200,000 over reserve by Green Real Estate Agency
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Rocky Bartolotto is a Director and Chief Auctioneer at Property Auction Services. Auction Services guarantees to provide and implement a professional process for our valued clients choosing to sell through auction. With over a decade of experience calling auctions across all Sydney regions, we are confident our auctioneers will provide you with a service that is unrivalled and unique to individual client requests. For more details, visit www.auctionservices.net.au. |
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