Melbourne househunters are bursting out of the blocks to buy at auction this year, becoming “tired of waiting” for further price falls, a specialist auctioneer says.
Sold By Auctions director Andy Reid said the new year appeared to have brought about a change in buyer attitudes that could be good news for vendors who had been “beaten up” by the market slump.
But this didn’t mean conditions would swing back in favour of sellers, just even things up a little.
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“Buyers have been told to hold off. But they’re tired of waiting,” Mr Reid said.
“They’re going, ‘I think prices have had enough of a drop, we now need to move our lives forward’.”
His comments follow WBP Group buyer’s advocate Greville Pabst’s prediction that smart househunters would get moving in the new year to take advantage of the market downturn.
“There has been no better time in the last 30 years to buy good property,” Mr Pabst told the Herald Sun in December.
“Making good decisions now will set buyers up for the next upswing between 2021-2025.”
A recent CoreLogic report also showed how far Melbourne’s auction market has fallen, with the citywide clearance rate falling 22 per cent last year.
Mr Reid said buyer numbers had already risen at open-for-inspections this year.
He’d also seen competitive bidding at his first auction for the year in Noble Park on Saturday — including from a first-home buyer couple who saw the property for the first time that day.
They inspected the four-bedroom house at 5 Jacana St for the first time during the auction’s halftime break and joined two other parties bidding.
Mr Reid said they ultimately lost out to an older couple buying for its son, who paid $592,000 against a $580,000 reserve.
But their eagerness reflected the shift in buyer urgency, Mr Reid said: “They showed no hesitation in bidding.
“I had three buyers say to me (on the day of the auction), ‘We missed out towards the end of last year and now we want to get things going’.”
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Mr Reid last year chastised buyers for “playing it too cool” and not bidding, hoping instead to negotiate a good deal when properties passed in.
He said this tactic often ended with buyers having to compete against others in a non-transparent private sale process, and typically “paying more than if they’d put their hands up at the auction” or missing out entirely.
While buyers upping the ante could give prospective vendors more confidence in selling, they’d still need to be realistic about pricing, the auctioneer said.
“They’ve got to understand it’s not a vendor’s market, it’s far from it,” he said.
“The longer a property is on the market, the worse it’s going to get. Vendors need to make sure their properties are priced reasonably so they can get in and out of the market quickly.”