Sydney and Melbourne house price growth may have slowed in the last few months but that did not stop Goldman Sachs managing director Alastair Lucas from buying the most expensive house sold at auction on the weekend.
The three-bedroom, 125-year-old terrace house on Vale Street in the suburb of East Melbourne saw strong bidding despite bad weather, with Mr Lucas prevailing at just over $3 million.
“It’s a very good-looking Victorian-era house in good nick,” Mr Lucas told The Australian Financial Review. “And being just one kilometre from the city puts it in a special category,” he said.
Strong bidding across the city could not prevent Melbourne recording its 10th consecutive week of auction clearance rates below 75 per cent. Caine Real Estate director Paul Caine, who sold the Vale Street property, said the reserve was in the mid-$2 million range.
“We probably see the best of the market in this area,” Mr Caine said. “We have still got a 90 per cent clearance rate here at the moment.”
He said the auction started slowly with a vendor bid of $2 million, but then sped up with three people duelling it out among a crowd of about 150.
Melbourne prices have grown 11.6 per cent over the 12 months to April and the median dwelling price is now $552,000. However, Melbourne prices fell 0.5 per cent in the month of April according to RP Data.
MARKET HAS ‘STEPPED DOWN A GEAR’
In Sydney, residential property auctions notched up their fifth consecutive weekend of sub-80 per cent clearance rates, providing further evidence of a cooling in the city’s property market. While residential markets around the country have only just experienced the post-holiday “Super Saturday” auctions, Australian Property Monitors senior economist Andrew Wilson said there were no more excuses for softening clearance rates.
“I guess there were some excuses in the last few weeks following the big auctions post the Easter holidays,” Mr Wilson said. “However, we have moved back to normal conditions so I think these results show the market may have just stepped down a gear.”
The number of reported auctions around the country has almost halved since last weekend, although is still well up on this time last year.
The value of property sold at auction in Sydney compared to last weekend dropped 35 per cent to $240 million.
The most expensive property sold in the city was a three-bedroom unit at Woolloomooloo for $2.85 million.
Morton & Morton’s Noel Jenkins, who sold the unit before auction, said the top end was slowing. “That level is not as busy as the under $1.5 million [market] and that’s because the lower end is still getting a better return.”
He said an owner could still get $700 rent for a $650,000 apartment in Rushcutters Bay, but would be looking at $1400 for a newly purchased $2 million-plus apartment.
While the Sydney housing market recorded yet another increase in price growth of 0.5 per cent in April, it was the lowest rate of monthly growth since its run of 11 consecutive increases commenced in June last year.