The REIV auction clearance rate remained stable over the weekend with 541 auctions reported. 372 properties sold with 282 of those selling at auction and 91 before auction. There were an additional 190 private sales.
The increase in interest rates last week came as no surprise with the official cash rate rising to 2.35%. There appears to be a consistent pattern with buyer behaviour each time an interest rate rise occurs with the week after, some buyers coming to a standstill. Some need time to adjust to the idea of higher mortgage repayments but also need time to calculate what that means for their budget.
Some auctions last weekend had large numbers in attendance but few willing to put their hands up. Those buyers that are confident enough to bid at auction are often buying the property immediately after it passes in. This means that vendors (generally speaking) are willing to negotiate to ensure they sell their property and likely the buyer has paid less than they were willing to.
We are still witnessing high numbers of buyers walking through open for inspections and also large numbers attending auctions. I believe there are many buyers out there who are currently sitting on their hands waiting to see what happens with interest rate rises and property prices. We know it is likely there are more interest rate rises to come, but once these rises slow down and then cease, it is likely the dormant buyers will come back into the market and be willing to purchase.
1/50 Grant Street, Malvern East went to auction on Saturday which is a well located, three bedroom, one bathroom villa unit in good condition. The property was quoted at $1,050,000 to $1,150,000 prior to auction. Five bidders in total participated in the auction where the property was announced on the market for $1,210,000 and sold for $1,363,000.
In Geelong, the auction of 15 Sanglen Terrace, Belmont attracted a large crowd with the four bedroom, two bathroom, two car updated family home quoted at $900,000 prior to auction. Bidding commenced at $950,000 with four bidders in total pushing the price to $1,055,000.
Have a great week.