Auction year's kick-off event sees significantly lower clearance rates than in 2022
The auction market could be in for a “bumpy” year if Ray White’s annual The Event auction on the Gold Coast is any indication.
The Event, held at the Royal Pines Resort over the weekend, kicked off the auction year. Results obtained partway through the auction event showed that the clearance rate was tracking at around 60%, according to a report by The Australian Financial Review. That’s a significant drop from last year’s 82% clearance rate on 101 properties.
Andrew Bell, chief executive of Ray White Surfers Paradise, said this year’s market was “bumpy” and a “mixed bag.”
“Last year people were throwing money, but it’s changed a lot this year,” Bell told AFR. “Buying interest is there, but now there’s a question mark of what’s happening.”
The Event kicked off the 2023 auction year, with three rotating auctioneers selling off properties across the spectrum, from one-bedroom units to luxury waterfront property to commercial development sites, AFR reported.
Bell said that about half of vendors had accepted the fact that the market was cooling down, while the other half were still insisting on price expectations from early last year, when “no-one was worried about interest rates.”
Gold Coast resident Simon Thomas sold his four-bedroom waterfront home for the reserve of $1.6 million. Although Thomas was happy with the sale, he told AFR that his timing probably cost him.
“Look, if I’d sold 18 months ago, the house could have sold for another 10%,” he said.
In one indicator of the slowing market, last year’s dedicated prestige sales event wasn’t on the schedule. Instead, the few available top-tier properties were sold during the general auction due to limited supply and falling luxury prices, AFR reported.
Bell said that while last year’s eight consecutive interest rate hikes had “scared the bejesus out of buyers,” the Gold Coast had been somewhat insulated from the price fallout by supply shortage and population pressure.
Read next: Auction clearance rates hit five-month low
“We’re actually getting a second wave of southern migration where the family and friends of people moving here have been visiting, and then decide to move based on the lifestyle,” Bell told AFR.
Bell said rising rents were another factor driving the supply shortage.
“The amazing crisis in rental accommodation is forcing people to buy,” he said. “People can’t find anything to rent and are now becoming buyers.”
The Gold Coast’s median house price is currently $972,708, a 1.7% drop over the past 12 months. However, that’s after a 44.1% price increase over the past three years, driven by the COVID-induced exodus to warmer climates.
Bell said that this year’s slower auction was a signal that the market was returning to normal after the buying frenzy of last year.
“It’s not a boom, it’s not a depressed market – it’s normal,” he told AFR.
Have something to say about this story? Let us know in the comments below.
