Buyer demand drives upward trend in home prices

An unexpected rebound in home prices across Australia’s biggest cities in the past few months shows no signs of slowing, with intense buyer demand driving another bumper weekend of auction activity.

An early start to the traditionally busy spring selling season has continued to strengthen and auction volumes on Saturday were up 12 percent on the previous week, according to data house CoreLogic.

“The volume of auctions has been rising through the second half of winter, with activity at the weekend up 27.8 percent from a month ago, and 22.1 percent higher than this time last year,” CoreLogic research team lead Duane Kaak said.

Even so, new for-sale listings remain well down on previous years, forcing a large pool of hopeful buyers to part with more cash to secure a home.

In Sydney, the weekend’s preliminary auction clearance rate is sitting at 73 per cent, with 305 successful sales from 419 results reported so far.

In Enmore in the city’s inner west, a pair of run-down neighbouring terraces on one title sparked a feeding frenzy among prospective buyers.

The successful bidder for 43 and 43a Edgeware Rd was 15 minutes late to the action but quickly made up for lost time, paying $1.918 million for the deceased estate. The sale price was well above the reserve of $1.4 million.

Meanwhile, a five-bedroom house at 4 Alsace Ave in Bardwell Valley in Sydney’s southwest fetched $2.15 million – some $550,000 above reserve, with five bidders battling it out.

Melbourne’s preliminary auction clearance rate of 68 per cent is based on 346 reported results from 704 scheduled sales.

A three-bedroom cottage at 10 Mckeon Ave at Pascoe Vale South in the northern suburbs drew strong interest, selling for $1.64 million – $190,000 above reserve.

It was the first time the retro wonder had come to market in 70 years.

Brisbane’s preliminary clearance rate of 59 per cent represents 17 sales from 29 reported results of a total 64 scheduled auctions on Saturday.

A prestige property at 41 Mayfield St in affluent Ascot fetched a whopping $4.03 million after swift bidding from nine parties.

Despite economic uncertainty, high interest rates and a cost-of-living crisis, high demand and low supply are putting upward pressure on property prices across the major capitals.

Home values across the country have recovered much of the declines seen throughout 2022, with a 2.79 per cent increase since December, according to the latest PropTrack Home Price Index.

“Interest rates were the primary driver of home price falls seen for much of 2022, but there are other factors – like the supply of properties for sale, labour market conditions, rate of immigration, home building, state of rental markets and interstate and regional migration –that also affect price growth, as well as how it is distributed across the country,” PropTracksenior economist Eleanor Creagh said.

In July, Sydney’s median home price rose 0.28 percent to $1.04 million and is 3.16 percent higher year-on-year.

Melbourne values remain flat, with a modest 0.01 per cent lift last month taking the median to $805,000, while in Brisbane, the median of $742,000 increased 0.37 per cent, up 1.98 per cent on July 2022.

“Although total stock on market has increased slightly, the flow of new listings has remained soft in recent months, leading to increased buyer competition and solid selling conditions with prices continuing to lift.”