Sydney’s property market has been on a tear for a few months now, with record-high clearance rates at weekend auctions as the effects of Australia’s record-low interest rates finally kick in.
But some owners are hobbling themselves by wading into auctions with high vendor bids that are shutting out buyers and killing the sale.
Fairfax Media reports today on two properties that recently failed to sell because of outrageous expectations from the vendors.
One of them was a three-bedroom house in Mascot, near Sydney Airport south of the city, which one prospective buyer said needed extensive renovations. Auction participants were stunned by a vendor bid of $1.125 million, and the agent reported the sellers were hoping for a price closer to $1.2 million.
Buyers agent Tom Penfold told Fairfax: “Buyers are getting frustrated… “We are starting to see properties that you would definitely think would sell, passing in.”
There are many reasons to believe the market heat in Sydney and Melbourne isn’t a bubble – chiefly that prices are effectively returning to trend after three softer years of growth.
But one of the hallmarks of a bubble is an optimism approaching mania from participants. Not everyone’s lost their heads, though, and that’s precisely why property owners hoping to make a tidy profit from the current heat need to keep their expectations in check.
To back it up, in a Westpac survey last month that asked respondents if it was a good time to buy property, the index fell by more than 10 points.
There’s more at the SMH.
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