Buyers Are Well-Aware They Have The Upper Hand
A report from the Australian Financial Review. “Just like the party room at Parliament House on Friday, you can cut the auction tension over the weekend with a knife. The Australian Financial Review went on a roadtrip to the western Sydney suburbs of Guildford, Merrylands, Lidcombe and Wentworth Point and saw agents and sellers herding in buyers like cattle, bringing down the hammer in less time you can say ‘house prices.’ On the flipside, agents with no bidders were quick to downplay their dismal situation with auction accomplishments of a bygone time. While many agents said cool conditions were just a winter lull, Corelogic said winter auctions were about 20 per cent lower than last year, ‘highlighting a substantial weakening in vendor confidence driven by the softer housing market conditions.’”
“That was clear to see at the sale of a two-bedroom unit at 16 Baywater Drive in the apartment city of Wentworth Point, west of Sydney. It has been on the market for nearly a year and its asking price has fallen about 12 per cent in that time. Public records show it had an asking price of $730,000 last October, and on Saturday it passed in at $645,000 from one registered bidder against a new asking price of $675,000.”
“At two other auctions - a three-bedroom unrenovated home at James Street in Guildford and a four-bedroom two-level penthouse at the newly completed apartment project of ‘The Skypoint’ at John Street, Lidcombe - the Financial Review was the only attendee at the auctions. The agent marketing The Skypoint penthouse said its asking price was $1.2 million, a steal for 320 square metres of space and six parking spaces and he was right. At $1.2 million, that would be a significant low of $3750 a square metre, unlike the rest of inner city’s $12,000 to $15,000 a square metre.”
“Looking at the latest sale data on the unit, the developer just sold it for $1.265 million in June to an investor. When asked why the investor wanted to sell it if it was such a steal, the agent said it was best to ask the owner but it was likely they ‘needed the capital.’”
“On Frampton Street in Lidcombe however, a rundown home sold for $1 million. Its value lies in its 595sq m of landholding. Buyers are well-aware they have the upper hand when a neighbour was overheard telling a buyer, ‘that’s not expensive, a while ago, something with that much land sold for $1.4 million.’ ‘Wow, we are really in a buyer’s market,’ the buyer said.”
“In Melbourne, buyer’s agent Morrell and Koren’s Emma Bloom said agents were moving to a ‘less transparent’ private treaty sale process to ‘protect values’ of homes. ‘There are now either no bidders, or one bidder,’ she said.”
“The passed-in auction of 52b Lansell Road, Toorak is a sign of the times after its sister property next door 52a sold in June, she says. Another sale that went against vendor expectations was the $6.25 million sale of 23 Airlie Street in South Yarra. It once had an asking price of $8.5 million, she adds.”
From Domain News. “NAB economists have downgraded their property price forecasts and say sentiment toward property has dropped to a two-year low. The move comes three weeks after rival bank ANZ cut its own property price forecasts. Chief economist Alan Oster nodded to ongoing concerns of regulatory tightening and shifting market dynamics. ‘Overall confidence levels fell to a new survey low, driven down mainly by NSW and Victoria where capital city house prices declined,’ according to Mr Oster.”
“Meanwhile, ANZ also offered a sombre view on residential property prices on Thursday, with the results of its own sentiment survey showing nationwide falls. ‘The survey results support our view that house prices are set for a sustained decline,’ ANZ head of Australian economics David Plank wrote.”