Property prices in Melbourne and Sydney’s sprawling middle-class suburbs are going gangbusters as the lower and top-end markets are in danger of being busted by prices that are either too high, or not high enough, according to real estate specialists.
Melbourne’s south-east suburban sprawl is maintaining clearance rates of nearly 90 per cent and Sydney’s mid-market remains very strong, according to the weekend auction results.
But buyers’ agents complain about sellers sitting on high-end properties in the hope for better prices, particularly in Melbourne’s prestige market. Analysis also shows half of people renting claim they cannot afford a deposit.
“Prices growth has moved past income growth,” Andrew Wilson, senior economist with Domain Group, said about a buoyant market that has reached an economic hiatus yet to be reflected by the auctioneer’s gavel.
The mid-market is booming but overall sales are book-ended by seller expectations that are too high due to booming prices, and would-be buyer hopes of getting into the market which continue to slip as prices rise and real medium wages fall.
Auctions were still hot in what is traditionally the first weekend of winter sales’ where buyers are meant to hibernate after an active autumn to recuperate in time for spring, according to real estate agents. Clearance rates in Sydney were 76 per cent and total properties sold topped $337 million, compared to 75 per cent and $323 million for the same weekend last year.
In Melbourne about 74 per cent of reported properties sold for a total of $324 million, compared to 68 per cent and $300 million, 12 months ago.
The top seller in Sydney was a $5.2 million two-storey house with four bedrooms and three bathrooms in Mosman. Melbourne’s top seller was a $4.6 million architect-designed house with swimming pool in Hawthorn.
Mr Wilson said sales are being dominated by home buyers trading up after previous sales or investors.
Melbourne’s south-eastern suburbs, particularly from Oakleigh out to the Dandenongs, are posting clearance rates of nearly 85 per cent, dragging up the overall average.
Another survey by realestateVIEW.com.au has underlined the impact of rising property prices on those struggling to bridge the deposit gap and buy a house.
More than one-third of renters have been renting for more than five years, and half of those cannot afford mortgage payments, according to the survey.
Parents are needed to either help fund the mortgage, either as an investment, or as guarantor, among 20 per cent of those surveyed, it found.
At the $5 million-plus end of the market, the complaint from buyers’ agents is sellers are holding out for more despite plenty of buyers “willing to pay a fair price”.
“There is a very silly disconnect between vendor expectations and what purchasers are willing to pay,” said Christopher Koren, a director of buyers’ advocate firm Morrell and Koren, who has been buying and selling properties for more than 30 years.