If you watched our IG stories or saw it in the media, you’ll know our prestige auction event on the weekend was a success. (You can read about it all here in Domain.com’s “Eight Brisbane homes fetch $35m under the hammer in just over an hour”.)
From my perspective, there are a couple of key themes, aside from overall market confidence and consistently low rates, that underpinned the success of this prestige auction.
- Locals are eager to nab the cream of the property crop ahead of the southern lockdown lift. Even ahead of the borders opening, we’re finding with high-end properties there’s a 50-50 chance of selling to a local or interstate buyer.
- Buyers are racing to beat the arrival of the tighter credit conditions that were announced last week. The result has been soaring auction clearance rates that surpassed 80 per cent in every capital city.
We, too, had a clearance rate of 80 per cent; including three properties that sold prior. We have another auction event scheduled for November (Auction under the Stars on the rooftop of the Calile) and then the final auction event for the year in December.
- APRA is making credit harder to access. Last weekend marks the first since lending standards have been tightened in the face of soaring prices. Now this could see thousands of dollars slashed from buyer’s borrowing capabilities, potentially causing the market to soften. It looks likely that credit restrictions will focus on minimising household debt relating to home loans or lifting the minimum interest rate serviceability assessment.
- Buyers aim to beat the credit clampdown. Buyers will likely be a little more exuberant trying to beat out the credit conditions coming in at the end of the month. And that exuberance will bode well for sellers in October and November, as increased housing stock has the potential to flatten prices. Though, that hasn’t happened through spring… at all.
- More supply is not satiating demand. This month has been a test of the depth of demand in the market. Brisbane home sales are tracking 42% higher than the five-year average for this time of the year, but active listings are -33% below the five-year average. Clearly buyer demand is continuing to outweigh advertised supply which is keeping housing market conditions skewed in favour of sellers over buyers.
- The rise and rise of Australian house prices. Australian housing values rose 17.6% higher over the first nine months of the year and 20.3% higher over the past 12 months. The annual growth rate is now tracking at the fastest pace since the year ending June 1989. Brisbane’s quarterly growth rate is the highest amongst the major capitals, with values up 5.9% over the September quarter.
- Leveraging the end of lockdowns. There is strong market confidence coinciding with Sydney’s release from its coronavirus lockdown and with Melbourne just weeks away from more freedoms. We could seen even more southern buyer interest in Brisbane but the end of lockdowns will also probably spawn the release of pent up supply in those geographies that will test the market demand.
- Sellers are getting the prices they want. According to CoreLogic, vendor discounting levels remain around record lows at -2.8%. They’re able to set a dream price, and with the right strategy and marketing, attract the buyers who are willing to pay that price.
These are prime market conditions for owners of prestige property. There are plenty of trends to keep an eye on throughout the last quarter of the year.
The results of our upcoming auctions in November and December will be an excellent barometer for the property market’s balance and buoyancy. If you’d like your property to be included in our next auction event, please reach out.