Buyer Confidence May Mean Real Estate Market Revival
San Francisco, CA -- (SBWIRE) -- 11/02/2012 -- Property auction clearance rates are outperforming last year’s levels in Sydney and Melbourne, leading many to believe the two cities may be in for a real estate market revival.
Sydney’s market has performed slowly yet steadily throughout 2012. Melbourne’s market, however, has been sluggish.
Now both markets are improving, particularly, say industry experts, in the multi-million dollar bracket.
The recent “Super Saturday” event, Australia’s largest real estate auction of the year, saw Sydney’s clearance rate up 13% over the same time last year, while Melbourne saw 1,180 homes auctioned over the weekend, up from 742 the previous weekend and from 405 during the same time last year.
The high price sellers during Melbourne’s Super Saturday event were a Port Melbourne home that sold for $4.1 million, a Kew home that sold for $3.92 million, and a St. Kilda West home that sold for $3 million.
The most expensive sale in Sydney was a Northcote Avenue home in Killara that sold for $4.22 million. Philip Waller, of McGrath, the agent who sold the home said it was valued at $5 million in 2006. “The buyer could see the value in the property. A similar home sold nearby for about $7 million,’’ he said.
Although Waller had hoped to sell the home for about $4.5 million, he was pleased in general with the results and considered them a positive sign of things to come. “Overall, the market has been better, and even at open for inspections we’re finding there is more confidence,’’ he said. “I’ve had offers of about $4 million and $5 million for homes in the last few days and it has been good to see people coming out and making offers again.”
According to Mal James, a Melbourne buyers agent, sellers are seeing good results when they price their homes in keeping with the market. “A long drought on good stock meant there were some thirsty buyers out there, ready to snap up the good properties that were on offer on Saturday,’’ he said.
James noted that demand is especially high in the $2 million-plus market. The increased consumer interest should stimulate more of the same, he added. “Activity breeds more activity, so we would expect more properties to be coming onto the market over the next few weeks as well as more off-markets,’’ he said.
Scott Banks of Scott Banks Real Estate said that in an effort to be cautious, many buyers negotiated prices following the auction.
“There is a lot of that happening, but there are certainly a lot of happy vendors around after the weekend.”
Buyers advocate Christopher Koren said that while houses he worked with 15 years ago were 90% auctioned and 10% off-market, today about 20% of the homes he manages are off-market.
“There is talk of a few properties worth around $25 million which will be coming on to the market for sale, but of course they will transact off market as there is such a small number of people who could actually afford to buy in that bracket,’’ he said.
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