Economists have lowered their expectations for the housing market after the Reserve Bank of Australia increase of 50 basis points larger than expected in the spot rate earlier this month, which took the benchmark rate to 1.35%. Many expect it to be reach 2.5%.
Higher borrowing costs for homebuyers coincide with falling consumer confidence as inflation – which RBA Governor Philip Lowe expects 7% spike – increases, weakening purchasing power.
Last week, ANZ chief economists Adelaide Timbrell and Felicity Emmett said property prices in Sydney could dive up to 20% between April this year and the end of next year, less than a month after announcing that prices in Sydney would fall by 7% this year and 8% next year.
In this environment, the most confident buyers are those with more equity and less reliance on credit to buy a property.
A two-bedroom flat in North Sydney sold for $1,462,000 at auction on Saturday – $127,000 more than reserve – after a NSW-area couple fought with another party to secure the house 10/18 Ridge Street for their Sydney-based daughters. .
‘The property had all the features – a great location in a bustling center but quietly located at the rear of the building on the north side and very well presented,’ said agent Chris Davies of Belle Property Neutral Bay.
“Even with market uncertainty, this sale shows that buyers are willing to pay for quality properties.”
Overall, however, Sydney posted its lowest preliminary approval rate in more than two years, with a rate of 55.4% based on 624 reported results from 793 scheduled auctions.
The highest clearance rate in the NSW capital was at Sutherland Shire in the southern suburbs, at 71%. The lowest rate reported by CoreLogic was 33.3% in the southwestern suburbs.
In Melbourne’s Toorak, a four-bedroom house sold for the value of land went on the market at $8.2 million and sold for $9,050,000 – more than $13,500 per square meter – to a promoter,
“It’s as strong a result as you would ever see,” buyers’ agent Emma Bloom said.
“There is no distress yet. There is still a healthy appetite for high-end properties.
Sales agent Hugh Hardy of Abercromby’s, who sold 23 St George’s Road to sellers 21 years ago for $1.4m, said it would likely cost between $6m and $6.5m to rebuild on the site and that the new finished home would likely arrive “way north”. of $20 million.
In the lower price brackets, however, the market weakens. In Melbourne’s east-central East Kew, a 2018-built, 589-square-meter four-bedroom house that sold in February last year for $3,667,500 at auction went to the sole bidder on Sunday who offered $3.625 million.
The 53 Spruzen Street property, advertised with a price range of $3.6-3.85 million, sold in post-auction negotiations for an undisclosed price, Kay & said Burton agent Gowan Stubbings.
The number of auctions scheduled in Melbourne during the week nearly tripled from 450 to 1,264 the previous week and the preliminary clearance rate rose to 57.9% from the previous week.
The final rate of 52.4% the previous week was the lowest in the city since September of last year.
Adelaide had the most scheduled small town auctions, with 179 and posted a preliminary clearance rate of 70%, up from 78.7% a week earlier.
Canberra had 101 scheduled auctions and a preliminary rate of 64%, down from 59.2% the previous week. Brisbane held 174 auctions and posted an initial rate of 52.2%, also up from a preliminary 48% the previous week.
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