While temperatures soared outside, the signs of Sydney’s cooling property market were evident for all to see at the auction of a Maroubra apartment on Saturday.
It had all the makings of a hot Sydney auction: a prime beachfront setting, gorgeous views and apartment hunters keen to buy before Christmas.
But that wasn’t enough to secure a new owner for the ground floor, two-bedroom apartment at 1/458 Maroubra Road.
Auctioneer Glenn Farah, of N G Farah, was greeted with silence when he called for an opening bid for the apartment, which records show last sold for $600,000 in 2002.
“Let’s start it low and watch it go,” he said, after a bidder eventually piped up with a $1million offer.
And go the bidding did, jumping up in $50,000 increments as three bidders — an investor and two owner-occupiers — battled for the keys.
But after hitting $1.2 million the bidding slowed. By $1.28 million, it had come to a halt and the property passed in more than $100,000 short of the reserve.
“The market has definitely been hit by a cooling effect,” he said. “There’s also a lot of property for sale, buyers have a lot of choice, and the market is finding its own level between [the price expectations of] vendors and buyers.”
Listing numbers over spring and summer are up 20 per cent compared to the same period last year, and clearance rates have taken a hit.
Last weekend, Sydney’s preliminary auction clearance rate dropped to a two-year low of 58.2 per cent. More than 100 vendors also got cold feet, meaning 13 per cent of auctions scheduled for December 9 were withdrawn.
There were 510 listed auctions in Sydney on Saturday, as the auction season winds up for the year. By evening, Domain Group had recorded a preliminary auction clearance rate of 69.7 per cent from 182 reported results. Twenty-nine auctions were withdrawn and agents failed to report the results of 299 auctions.
Had the 76-square-metre apartment been on the market in September — when Mr Farah sold a nearby comparable apartment at 3/152 Marine Parade for $1.52 million — it could have been a different story.
He said vendors had been slow to adjust their expectations to market conditions, while buyers were increasingly holding back at auction, with hopes they could negotiate a better deal if the property passed in.
Mr Farah said he expected a sale price between $1.3 and $1.4 million would be negotiated in the coming days.
Among the unsuccessful bidders was a local family who tapped out of bidding at $1.27 million.
“We thought it was a fair price,” said Kellesi from nearby Tamarama. “We’d hoped it could be the next step up for us, a bigger place, closer to the beach, with parking,” said her partner, Steve.
He added it was frustrating to see the apartment pass in, especially due to the time and money buyers spent doing their due diligence before an auction.
In the city’s inner west, a two-bedroom semi at 147 Queen Street, Ashfield sold for $80,000 above reserve.
The bidding kicked off at $1.1 million, after which a local couple jumped in with a bid of $1.35 million, in an attempt to quickly knock out the competition.
It worked. Only three of the six registered bidders made offers on the home, before it sold for $1,405,000 to the couple, who were keen to buy before their upcoming wedding. The result was more than double the $659,000 records show the home last sold for in 2011.
In Clemton Park, in the city’s south west, a home sold for $1,211,500. But despite six active bidders in the mix, the auction was very slow.
Bidding on the three-bedroom deceased estate at 22 Jarrett Street started at $950,000 and climbed in $10,000 increments to $1.1 million. Minutes later, bidding had fallen to $500 jumps.
“It’s a good result, given the market is what it is,” he said. “The market isn’t going great, and I reckon it will be the same next year or it might be worse, it will make our job that bit harder.”