First-home buyers are taking advantage of softer market conditions across the country with a one-bedroom apartment in a prime inner-city suburb fetching more than $100,000 over its auction reserve - with no investors in sight.
Four first-home buyers battled it out for the deceased estate in the inner-city Sydney suburb of Forest Lodge, placing dozens of bids before it sold under the hammer for $757,000 on Saturday.
It was one of 1,194 properties scheduled for auction across Australia last week, recording a preliminary national clearance of 43.7%, according to PropTrack.
Auctions in Sydney and other parts of the country have been softening since the Reserve Bank started hiking interest rates earlier this year, with the city’s clearance rate reaching 40.4% last week.
Some experts say the cooler property market conditions are shifting the balance in favour of first-home buyers, upsizers and downsizers, while others are urging caution and warning it remains unclear what could come in the months ahead.
The one-bedroom apartment at 33/211 Wigram Road, Forest Lodge sold for $757,000. Picture: realestate.com.au/sold
But one key takeaway from the surprise auction result is that first-home buyers are out in force, and are chasing affordable homes that are close to infrastructure and amenities.
The property: The one-bedroom, one-bathroom apartment at 33/211 Wigram Road, Forest Lodge sold at auction for $757,000 on Saturday 18 July.
The home offers low-maintenance living while situated just moments from cafés, parklands, universities, Royal Prince Alfred Hospital and the CBD.
Suburb snapshot: Forest Lodge is a small inner-city suburb located four kilometres southwest of the Sydney CBD.
Four first-home buyers registered for the auction. Picture: realestate.com.au/sold
The suburb is situated between Annandale and Glebe and is adjacent to the University of Sydney and the University of Technology Sydney.
Forest Lodge’s median unit price has decreased 6.5% to $1.145 million during the year to June, while the median house price has declined 4.4% to $2,391 million, according to PropTrack.
However, smaller apartments have been a bright spot in Forest Lodge, where the median price for one-bedroom units has jumped 6.1% to $815,000 over the past year.
The apartment had been updated with fresh paint and new carpets. Picture: realestate.com.au/sold
Selling agent James Cahill of Belle Property – Glebe oversaw the campaign and spoke to realestate.com.au about the result.
What happened during the campaign?
It was a four-week auction campaign for a deceased estate and we had over 50 buyers to inspect the property throughout the campaign.
The apartment had a reserve price of $650,000 and sold under the hammer for $757,000. Picture: realestate.com.au/sold
The auction guide was $650,000 and the reserve matched the guide at $650,000.
What happened during the auction?
It was a good auction and showed the competitiveness of the first-home-buyer market. We had four registered bidders who were all first-home buyers.
It was a very spirited auction with around 34 bids and the bidding opened at $640,000 and closed at $757,000 for the winning buyer.
What types of buyers did you see during the campaign?
Most of the interest came from first-home buyers, but we did see a few investors in and out. The kitchen and bathroom were both over 40 years old, so while the property was functional and liveable, it clearly needed updating.
The neat apartment offered low-maintenance living while being just just moments from popular amenities. Picture: realestate.com.au/sold
Every buyer who came through liked the idea of being able to put their own stamp on it, which is what it now requires.
Were you surprised by the results?
Yes, very much so. The last sale in the building, in a stronger market, was a renovated one-bedroom with a better aspect that sold for $730,000.
So we were all very surprised that this unrenovated apartment achieved $757,000, which again shows how competitive the first-home-buyer market is and how important location is.
What's happening in your market at the moment?
Our market is riding the storm pretty well, I’ve had a very good month with some strong results. I’ve been working in Glebe and Forest Lodge for 23 years and this market always rides the storm fairly well because we don’t have an oversupply of properties.
The median price for one-bedroom units in Forest Lodge was $815,000 in June. Picture: realestate.com.au/sold
It’s the location that counts, it’s a very magnetic area, and people who live here tend to stay in the area.
Predictions for the area?
We’re in a very typical winter market at the moment, where things always quieten down. Despite a lot of negativity around different markets, I think our market is riding it better than most.
Over the next 12 months, I see conditions as quite preferable and I expect prices to increase, not decrease.
What's your top tip for sellers?
Presentation really counts, and transparency in the marketplace around pricing strategy is crucial. Being clear with buyers about where they need to be positioned in order to own the property is very important.
Forest Lodge is located 4km southwest of the Sydney CBD. Picture: realestate.com.au/sold
The weekend’s result proved that. The sale met the guide, we had strong competition and some emotional buyers, and ultimately it was a great result.
What's your top tip for buyers?
Don’t chase a bargain, buy quality and location, and use every government incentive available.
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