Sydney clearance rates tread water, as vendors sell to buy upwards

Sydney homebuyers attempted to upgrade their standard of housing at minimal cost in selected suburbs on the weekend, as the city’s auction clearance rate continued to tread water.

Weaker market conditions across the city contributed to a 50.8 per cent weekend clearance rate from 297 reported auction results.

The reduced price volatility for housing is giving some momentum to second and third-time owner-occupier buyers, many of whom believe they can upsize to a larger family home at fair-value or discounted prices.

On Saturday, 10 buyers registered to bid for a large Federation house with a granny flat on a 561-square-metre allotment at 14 Nicholson Street, Chatswood.

The property had a $2 million price guide but sold under the hammer for $2.22 million after four of the bidders competed in front of 70 onlookers.

Shead Property selling agent Hugh O’Neill said the house was in good condition but was likely to need an extension and a new kitchen soon.

“We always felt that the property was going to get a reasonable result,” he said. “Around $2 million is a good price point in this area – it is the entry level for the east side of Chatswood.”

Mr O’Neill noted that home upgraders in his patch were coming from a core area covering Roseville, Artarmon, Chatswood and Willoughby.

More than 80 families inspected the Nicholson Street house – a pointer to the strength of demand for larger family homes.

Cobden & Hayson-Balmain agent Peter Gordon said many of his office’s clients were vendors selling to buy upwards.

“They have seen that the value proposition is actually better,” he said. “If they take 10 per cent off their expectations on a $1.5 million property and roll that into a purchase, taking 10 per cent off a $2.5 million property, it works in their favour. The gap gets smaller as you buy upwards.”

This weekend saw a number of freestanding homes with good-sized backyards attract competition from families at auction and creep past their reserves and price guides.

NNW Property sold a three-bedroom period house at 171 Ryedale Road, Denistone, for $1.355 million. The price was just $5000 above the top end of the quote of $1.25 million to $1.35 million put on the property.

Properties priced below the median price for their area fared well, too. In Newport, First National Pacific offloaded an old weatherboard home on a large block at 120 Queens Parade East, for $1.8 million. The house price median in Newport is $2.033 million.

Across town, a budget-priced terrace at 14 Batman Lane, Surry Hills, sold under the hammer for $990,000, with three millennial buyers competing. The reserve was $950,000.

Belle Property – Surry Hills selling agent Nicholas Charles said the property was inspected by 136 groups and was popular due to its entry-level price point for the area.

“There are buyers out there who are willing and able to buy,” he said. “This is a normal market, with abnormal lending conditions driven by the royal commission into banking.”

There were numerous one-bidder and no-bidder auctions this weekend. Domain Group data showed that nearly one-in-five booked auctions – 101 properties – were withdrawn from auction. A total of 553 auctions were scheduled.

When bidder numbers are lower, prices are more volatile and harder to predict.

During the Sydney housing market’s five-year bull-run to mid-2017, most buyers grudgingly accepted they needed to pay 10 per cent or more above fair-value estimates to secure a desirable property.

That’s no longer the way most purchasers think. Except in the prized pockets of inner Sydney, buyers are striving to purchase at right on fair-value prices or below.

The most expensive house sale reported to the Domain Group on the weekend was 32 Heydon Avenue, Warrawee. The 1930s Tudor residence sold in late-September for $3.7 million through Ray White Turramurra Wahroonga.

Meanwhile, a nearby four-bedroom house with a pool at 36A Bangalla Street, Warrawee, fetched $3.3 million. Di Jones Real Estate North Shore was the selling agent.

In the east, an original California bungalow at 8 Gardyne Street, Bronte, on a huge 452 square metres was sold for $3.565 million through Phillips Pantzer Donnelley Woollahra.