Seven investors descended on the St Marys auction on Saturday, where a three-bedroom house with two kitchens, several living areas and sheds sold for $1.95 million, or $50,000 below its $2 million reserve.
Deceased’s estate in 44 King Street it didn’t have a price guide, but buyer feedback had it in the $1.4 million to $1.5 million range.
It was one of 807 properties set to be auctioned in Sydney last week, the first test of the market after Treasurer Jim Chalmers launched it. changes in the federal budget for tax concessions on investment propertiesas well as distribution measures, to increase home ownership.
As of Saturday evening, Domain Group had recorded an initial auction approval rate of 51 percent from 445 results reported for the week, while 168 auctions had been cleared. Canceled auctions are counted as unsold properties when calculating clearance rate.
The approval rating is slightly lower than last week’s preliminary result of 55 percent, though both point to a weak market as buyers adjust to three rate hikes this year.
Bidding at St Marys opened at $1.4 million, benching five of the seven registered parties, all investors.
Two investors went back and forth in a series of $50,000 bids along with several $100,000 bids until the price rose to $1.9 million, where it stalled. The $2 million reserve was then signed for sale at $1.9 million, and an additional $50,000 bid brought the hammer down.
Selling agent Amber Boumelhem of Ray White United Group said: “I really thought the property would go through today.”
“I was surprised because … once they announced the budget, I thought (that) King Street, not a single person was coming.”
Boumelhem said interest in the suburb had grown since it was announced as a metro station for Western Sydney Airport. He estimated the rental return at $800 to $840 a week for a family home.
The buyer was an investor from Wollongong who will lease the property and bank it. A junior bidder came from western Sydney who drove by that day and was just interested in his location.
In Pyrmont, a three bedroom apartment in 704/18-20 Allen St passed the seller’s bid of $1.45 million, and neither of the two registered owners made an offer on the flat that had a guide of $1.45 million to $1.55 million.
John Zheng of LJ Hooker said: “The new budget and the new property law have made buyers very nervous to enter the market. We also have a number of investors (who) quit this week.”
In Putney, a three-bedroom villa there 7/210 Morrison Road sold $100,000 above its $1.65 million guidance, and $50,000 below its $1.8 million reserve, for $1.75 million.
There is no legal requirement for the seller’s reserve to match the guide price of their property.
With only one buyer registered, negotiations began before the auction began, and the buyer was shown a reserve price of $1.8 million. An initial offer of $1.74 million was made before the seller countered with $1.76 million and the two met in the middle at $1.75 million.
After the auctioneer opened the auction, a bid of $1.75 million was made and called three times before the hammer fell.
Selling agent George Agostino of McGrath Ryde said: “We were expecting three (buyers) but only one turned up.”
“Many investors (investors) since the announcement of the budget have come to me asking me what my opinion is about it, and only great confusion about how the capital gains tax will work once it starts to be used in the listing and how the formula will be resolved, and of course, all asking about the negative gear,” he said.
Buyer is sizing up from Gladesville.
The deceased’s estate last sold for $775,000 in 2012, records show.
In Glebe, a three bedroom terrace in 3 Lombard Street sold above its $2.6 million guide and $2.85 million reserve for $2,965,000. The two-storey property had access to two roads and came with parking.
Four parties were registered and three bid on the inner west house.
Bidding started at $2.6 million and went up in $50,000, $25,000, $10,000, $40,000, $5000 and $15,000 increments.
Selling agent Hanna Kim of BresicWhitney Inner West said: “I was a bit worried about going through with it … if the buyers were hesitant about the budget and the changes, but it happened organically, without being pushy, which was great.”
Kim said the market is now less about price and more about the behavior of individual properties.
The buyer of the Glebe will be living between Bowral and Sydney. Vendors are expanding several streets away.
The terrace last sold for $1.65 million in 2013, records show.
PRD chief economist Dr Diaswati Mardiasmo said that Domain’s 51 per cent approval rate for Sydney was “certainly one of the lowest approval rates we’ve seen”.
“This is certainly an effect or a reflection of not only the increase in the money rate that happened earlier this month, but also the federal budget that is being released, and some changes and taxes on profits and negative trends.”
