Steady, not silly as Sydney auctioneers secure a 70.7% weekend clearance rate as RBA warns of household property borrowings risk
The prominent Sydney auctioneer Tom Panos not-so-secretly held an ambition to secure the sale of all 10 of his inner west weekend auction listings.
After all the inner west recorded an 86% clearance rate last weekend, and the RBA cut rates mid-week saw all the banks passing it onto home loan borrowers.
Panos however fell short - selling nine of the 10 homes.
And one of them was a $2 million sale in Croydon, a Federation bungalow which had been attracting so much interest that the R&H agent Romani Iskander had been forced to close the front door at times to stop the David Street house from being overrun during its open for inspections.
Set on a 735 sq m block in one of the best streets in the Malvern Hill estate, the four-bedroom full-brick house (pictured below) features an entry hallway with moulded archways, formal lounge and dining with restored fireplaces, cedar joinery and picture rails and wonderful high patterned ceilings.
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More than $1.8 million was being tipped for the house last sold at $1,662,500 in 2007, thereby reflecting a so-so 3% annual price growth for the vendors, ad man Bram Williams, a regular on the ABC’s The Gruen Transfer show, and his wife, designer Eloise Tucci.
Post-auction Panos suggested it was a record price, and perhaps twitter's limiting 140 characters, prevented a more thorough explanation as Property Observer is aware of a 2007 sale at $2.2 million of a five-bedroom Federation house on Malvern Avenue, Croydon, albeit on 1300 square metres.
His weekend sale did better the suburb's single block house price which stood at $1.93 million since the 2007 sale of a Chelmsford Avenue house, sitting on just 460 square metres.
Another auctioneer Peter Matthews did secure the sale of all 10 of his auctions advising the prices from $465,000 to $1.725 million included eight over reserve sales.
Cooley Auctions clearance rate was 71% today selling 22 of 31.
Rocky Bartolotto's Property Auction Services team secured the sale of 11 of 13.
The sales contributed to Sydney's overall 70.7% preliminary weekend auction clearance rate, based on the 294 reported in the Saturday evening tally, according to Australian Property Monitors.
Some 360 auctions were scheduled to go under the hammer so the final tally may shift as did last weekend’s Sydney auction clearance rate of 78.1% which was revised down quite dramatically with late results to 69.5% success rate.
"Expect this week's extraordinary cut in official interest rates - already passed on by most of the banks - to add more fuel to an already hot Sydney housing market," Australian Property Monitors senior economist Dr Andrew Wilson had anticipated.
Although Cameron Kusher at RP Data told the Australian Financial Review today it was unlikely the latest rate cut would prompt anything like a property bubble.
“The property market has been improving slowly since around June last year, but there was only a moderate change in prices after 125 basis points were cut in 2012,” Kusher said.
“I don’t see any reason for there to be big gains because of Tuesday’s cut.”
Their comments were against the backdrop of Sydney's April auction clearance rate being the third highest recorded for any April over the past decade - ranking behind the property boom periods of 2002 and 2010.
And also against the backdrop of the Reserve Bank raising their own concern that Australia's low-interest-rate environment could potentially lead to a quicker-than-expected rise in house prices on the back of households taking on higher debt.
The RBA's monetary policy statement, released on Friday after the official cash rate dropped to a historic low of 2.75%, noted in the household sector "a key risk is that established dwelling prices rise more quickly than assumed, spurred by low interest rates."
''The associated boost to wealth and sentiment could in time generate stronger-than-expected consumption growth. If these were accompanied by a return to increasing household leverage, it would raise concerns from a financial stability perspective,'' the RBA statement said.
Property Observer will provide a Sunday update and then a full round-up on Monday of all the capital city results, along with providing the revised figures as they become available.
The REIV reported a clearance rate of 72% this weekend compared to 69% last weekend, which was revised down from its preliminary 71% advisory.
There were 628 auctions reported to the REIV today, with 454 selling and 174 being passed in, 110 of those on a vendor bid. There were a scheduled 720 Melbourne auctions.
