Sydney auction market strong in blue chip suburbs where stock is limited

Property buyers dug deep to purchase $3 million-plus homes and superior redevelopment sites at the weekend as Sydney’s real estate market staged a return to form.

After three slow weeks, in which nearly four out of 10 properties went unsold, the auction market has strengthened considerably.

On Saturday, prospective buyers were gung-ho about bidding for properties in tightly-held areas, with the Domain Group posting a clearance rate of 73.2 per cent from 442 reported auction results. It was well up on last week’s 67.1 per cent clearance. The result was also just two percentage points below the clearance rate recorded in the same week last year and suggests it may be too soon to call the end of Sydney’s house price boom, especially in the most desirable suburbs.

Among the sales highlights on the weekend was a modern four-bedroom home in Wollstonecraft with extensive water views over Gore Cove. It sold under the hammer with eight registered bidders for $5.68 Million, while across town in Bronte a knock-down-and-rebuild property sold for $4.9 million, more than 20 per cent above its $3.9 million reserve.

About 60 onlookers came to Simeon Manners’ auction of 24 Milray Avenue, Wollstonecraft, which offered a “family sanctuary” contemporary home designed by architect Robert Weir on an 809-square-metre block.

Only four of the registered bidders made offers but these punters pushed the price $680,000 above the $5 million reserve. The house was eventually knocked down to a family, currently based overseas, who previously lived in Wollstonecraft.

The scarcity of houses in the pint-sized suburb, four kilometres north of the CBD, was the driving factor that underpinned the property’s high selling price.

“Because Wollstonecraft is so tightly held, very little comes up in that pocket, particularly a modern home like that one,” said Simeon Manners director Mark Manners. “There was a lot of interest in it because there is not much else to choose from.”

He added that with three or four other bidders sitting just under the selling level, the price paid “was obviously on the money.”

• Related: Click here for Saturday’s auction results
• Related: Click here for the Market Snapshot
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Elsewhere, a 1961-built Bronte home with ocean views, at 19A Gardyne Street, fetched a bullish $4.9 million at auction on Saturday. Marketed as a knock-down job or renovation opportunity by Raine & Horne, the rare listing on 446 square metres prompted a hot bidding duel. There were eight registered bidders, and the property punched far higher than its $3.7 million opening bid.

The most expensive auction property reported sold in the city on Saturday was a six-bedroom home at 33 Pymble Avenue, Pymble. The Sotheby’s International Realty listing sold for $5.7 million, which was below the nation’s top reported residential sale – $6.4 million for a house in the extremely tightly-held inner-Melbourne suburb of Middle Park.

Sydney’s property landscape is increasingly being driven by transport-handy, low-turnover locations.

The auction markets in the outer suburbs are tending to underperform. These areas, particularly in Sydney’s west, have traditionally been dominated by private treaty sales. But the growing use of auctions to sell outer-suburban properties, often with mixed results, has dragged down the overall clearance rate and masked the true state of play in some closer-in suburbs.

Buyer’s agent Rich Harvey, the head of propertybuyer.com.au, said the market was seeing a little more hesitation in some buyers. But he forecasts that blue chip areas such as the inner east, the lower north shore and the inner west will continue to be robustly supported because they offer a limited supply of dwellings.

“Buyers are not so much sick of the boom, but they want to have a chance to nail something,” Mr Harvey said. “As we move forward into spring and more stock comes onto the market, I think they will have a greater opportunity to negotiate better prices.

“But every suburb is different, and we are not quite back at a fully-balanced market.”

Property prices in sought-after locations are not only being supported by limited supply. New infrastructure – such as the light rail link going into the eastern suburbs along Anzac Parade and the north-west rail link from Chatswood – are plus factors, too. Anything that improves travel times and the amenity and access of a suburb is a boon for homeowners.

Domain Group chief economist Andrew Wilson said the revival in Sydney’s clearance rate at the weekend could indicate an increased motivation from sellers to meet the market and lower their asking prices.

He said most city regions recorded lower auction prices compared to the previous weekend’s results.

“The number of properties reported sold before auction in Sydney also soared over the weekend, increasing by 33 per cent to 145 compared to the previous weekend’s 109 with sellers clearly keen to secure a sale from a diminishing number of buyers,” Dr Wilson noted.

But Mr Manners said despite negative commentary on the outlook for Sydney sales, the market was “pretty strong,” especially at the top end.  

He said high-end buyers needed perseverance to get what they wanted: “Stock is tight, and I think if people find something they love – as they did at today’s auction – they will go for it.”

Inner-suburban, higher-priced regions led the market resurgence at the weekend.

The northern beaches was the best-performing region with a weekend clearance rate of 84.6 per cent. It was closely followed by the city and east with 83.6 per cent.

The next cab off the rank was the upper north shore with 73.6 per cent, then the south west with 72.7 per cent, the lower north with 71.9 per cent, the south with 70.8 per cent and Canterbury Bankstown with 70.6 per cent.