Wealthy downsizers held up the housing market last week – especially in Sydney – despite mild Labour Day weekend weather in Melbourne and three other cities.
The preliminary national auction clearance rate was 66.4 per cent according to Corelogic RP Data, down from 68.6 per cent the previous week. There were just 1426 auctions compared to 2304 a week earlier and 2556 held one year ago.
“The market followed the path of the Labour [Day] weekend last year,” Corelogic’s Kevin Brogan said.
“Year on year, numbers are showing there are fewer properties available or listed for sale in major cities such as Sydney, but when you look at the results of the sub-regions, they are amazing.”
Those sub-regions in Sydney include the ever-popular eastern suburbs, inner west and lower north shore with clearances between 78 to 85 per cent, where the buyers are mainly downsizers and empty-nesters.
Demand in expensive suburbs
In Cremorne Point, a local downsizing couple bought a 331sq m three-bedroom home built circa 1917 for $4.065 million on Saturday, $765,000 over its reserve price of $3.3 million.
The 1/6 Wulworra Avenue house with harbour views and restored by the vendor, architect Andrew Woodward, attracted about 150 people and 10 bidders.
“They were all wealthy downsizers who were quite emotional,” said selling agent McGrath’s Gareth Richards, who sold the house with colleague Piers van Hamburg.
“There were some really strong biddings – such a property comes once every 20 years.”
Mr Richards said most of the buyers in expensive suburbs such as Cremorne and Neutral Bay have similar characteristics – wealthy professionals in their sixties whose children have moved out of home. In the case of the Cremorne Point property, many bidders came from the sprawling upper north shore suburbs of Pymble and Gordon.
Likewise in Annandale, another stylish home, the three-bedroom Booth House at 31 Booth Street, designed by Tobias Partners, went to another downsizing couple from the North Shore for $2.36 million.
Five bidders competed for the 232sq m home which had a reserve of $2.25 million. Again, the 1880-built home was unique; it was shortlisted for a major interior design prize after a full renovation in 2010. Belle Property’s Robert Clarke sold the home, which has six-metre ceilings, a rare butler’s pantry and a wine cellar.
While the market was not as hot as last year, buyers were still confident, McGrath’s Mr Richards added.
“And the confident buyers are those downsizers who have owned homes, who sold at high prices or are about to sell their bigger homes. They have deep pockets.”
Even off-the-plan apartment sales were being picked up by mainly local downsizers.
In Sydney’s Double Bay, mainly local Rose Bay downsizers and owner occupiers bought nearly 75 per cent of Essence, a 38-apartment boutique project launched by Melbourne-based Chinese developer Golden Age. The most expensive home sold on Saturday – a $2.9 million apartment – went to a downsizer. The $110 million development at 315-321 New South Head Road has harbour views.
The story is similar in Melbourne.
“They want the lifestyle … and while these downsizers are in their 50s and 60s, they all want the ground floor master bedroom with ensuite and bathroom. They don’t want to move again and they want areas with great capital appreciation. And they will pay for high-quality fixtures,” said Greg Hocking of Greg Hocking Real Estate.
“And it’s picking up pace.”
But cashed-up downsizers and even upsizers are, unlike investors and rogue buyers, picky and cautious.
“The market has flattened,” said Harcourts Judd White agent Julie Karl.
“An elderly couple who sold at peak with a bundle of cash said to me they can afford to be picky at auctions.”
“Auctions are getting passed in a lot in Melbourne’s south-eastern areas, and even if they sell just after, they all had some price adjustments.”
Ms Karl said many investors and foreign buyers are also holding back in the south-east.
In off-the-plan sales, foreign buyer numbers have also adjusted downwards.
At Poly Real Estate’s first residential launch, the 235-unit stage one release of its 501-apartment project in Sydney’s Epping, about 9 per cent were foreign buyers. The rest were locals, 60 per cent of them owner occupiers. The 235 units were 82 per cent sold at its launch on Saturday. A premium three-bedroom sold for $1.52 million.
Another major off-the-plan project in St Leonards, also in Sydney, had similar success. In the 350-unit first stage launch of New Hope Group and VIMG’s Landmark residential tower, 180 units of sold this week. The 483-unit 500-504 Pacific Highway will be completed in 2020.
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