Tighter finance has kept a drag on home auction clearance rates in Sydney and Melbourne with the two major markets showing only a slight improvement on the weekend.
In Sydney the initial clearance rate of 264 homes came in at 51.4 per cent, up from 45 per cent the previous week, according to Domain’s weekend data. While Corelogic had a similar direction for the market with 55.1 per cent of Sydney properties due to be auctioned during the whole week selling, up from 49.7 per cent.
In Melbourne the initial clearance rate was 56.1 per cent, up from 55.3 per cent, according to Domain with the most expensive house sold at auction being a four-bedroom house on Stanhope Street in Malvern for $2.74 million.
The selling agent, RT Edgar’s Alex Broque, said the classic Victorian period home was expected to sell for between $2.6 and $2.8 million.
“We had two bidders – one was a local couple but they were stretched at $2.7 million. The other bidder was Chinese, very confident and driven to buy because of the nearby school.”
The Chinese buyer took the prize with less than 10 bids at the auction.
Mr Broque said the financial position of buyers was the key determinant for the softer market.
“It has been tougher. Buyers are more hesitant. I think some buyers are struggling to get the cash. Even the first-home buyers who are trying to get in around the $1.5 million range are struggling to get their finance.”
Recent data on housing finance points to a softening with new investor home loans falling to their lowest level in more than six years in April, as credit curbs started to bite.
Loans to first-home buyers also appear to have peaked, accounting for 17.6 per cent of all new loans in April, down from the 18 per cent mark in January.
The tighter credit comes as house price growth in both Sydney and Melbourne starts to unwind.
In Sydney $153.6 million worth of homes were sold on the weekend, a steep drop from the $437.1 million worth of homes sold this time last year. The most expensive home sold was a four-bedroom house on Darook Park Rd, Cronulla. Selling agent Murray Cole said the sale price of $5.8 million was just above reserve.
He had 11 registered bidders with five actually bidding.
“I don’t think we are in a hugely depressed market,” Mr Cole said, “I think we have just returned to more normalised levels. Fifty to 60 per cent clearance rates are actually normal.”
The house that sold has frontage to Gunnamatta Bay and its new owners will knock down the existing brick home to build a new house.
“We have had an influx of buyers in the Shire in the last year searching for value.”
The Shire recorded a 47.8 per cent clearance rate, according to Corelogic, down from 58.8 per cent in the previous week.
In other markets Brisbane recorded a clearance rate of 42.4 per cent while Perth recorded a 30.8 per cent rate.