A property in Sydney’s west drew fierce bidding on Saturday morning, revealing an affordability pocket and a foothold for first home buyers amid mounting market uncertainty and rate hike concerns.
The two bedroom villa at 3/177-179 Targo Road, Girraween drew strong competition, selling far below Sydney’s median house price for $860,000, $10,000 over its $850,000 reserve.
While barriers for entry of first-time buyers continue to get greater, enhanced by forecasts of another interest rate rise on Tuesday, the property below $1m saw interest from both first-home buyers and investors.
With four registered bidders, an opening bid of $800,000 began the auction.
While the competition was hot between all parties, increments of $10,000 dominated the bidding, with a first homebuyer securing the winning bid.
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Auctioneer Max Wylie calls the auction at Girraween
Auctioneer Max Wylie said “it was a great result”.
“It was great to see fierce bidding from all the registered bidders and they were obviously pretty keen to get their hands on it,” he said.
“Our vendors will be really happy with that result above their expectations.”
According to Mr Wylie, there was, however, a likelihood of softer bidding in the current auction market.
“I am seeing at the moment buyers are probably wanting to bid in smaller increments,” he said.
“But as we saw with that one, it kind of got a bit of a flow on and once we called it on the market it kind of got that second wind as well.”
Lead Agent Amit Nayak of McGrath Parramatta said the interest for the entry-level property was influenced by the current climate.
“We are hearing a lot more about the uncertainty, either it’s the war or the interest rate,” Mr Nayak said.
3/177-179 Targo Road, Girraween sold for $860,000
“I still believe even though the rates are going higher, areas like Girraween or Greater Parramatta region will still do very well because of the facilities and proximity we have in the area.
“It’s a very much affordable pricing when you look at the pricing in Sydney overall.”
Mr Nayak said townhouses and villas, like the property that sold at auction, have also been a popular option for buyers who do not want an apartment, but cannot yet afford a house.
Mr Nayak said there have been a lot of young families and first home buyers purchasing in the area around a similar price point.
“Anything below the $1.5m mark because of the first homebuyer scheme – we have still been seeing the market remain strong,” he said.
There are, however, signs of strain, Mr Nayak said homes around the $2m mark or above have seen pricing coming back, with activity slowing down.
Major banks and economists are increasingly anticipating a rate increase on Tuesday. Picture: NewsWire/ Monique Harmer
“Buyers are still kind of playing safe as well or they just want to wait and a lot of sellers at the same time are holding back,” he said.
“But if the stock level of listing remains low, we might see activity from buyer’s spike up which means we might see more competition or price going higher as well.”
Now that vendor Lavanya Gurunadhan kids’ are grown, she said they decided to upgrade and sell the home.
“We love this house and this community is very lovely, we feel like family,” she said.
“We are very happy with the result.”
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40 Grand View Parade, Lake Heights
One of the most-viewed residential listings on realestate.com.au of the week, 40 Grand View Parade, Lake Heights sold for $1.51m.
With 18 registered bidders and six active, the home was guiding around $900,000.
In the same family for around 60 years, Laing+Simmons St George Lead Agent John Kastellorios said buyer interest factors included its three frontages.
“It was a large crowd – pretty competitive bidding from the start,” he said.
In the Inner West, 111 Stanmore Road sold for $2.93m, above its guide of $2.7m.
Lead agent Ercan Ersan of Ray White Surry Hills said the buyer bid against a vendors bid of $2.9m.
111 Stanmore Road, Stanmore. nsw re
Mr Ersan said the investors, who will rent the property, were future-proofing themselves by securing their family home.
“They were worried they couldn’t afford it in five years when they have kids so they bought it now,” he said.
Ray White NSW head of auctions David McMahon said 165 auctions were scheduled for Saturday, which remains slightly below the pace this time last year, but there is “certainly no dramatic drop-off in auction volume.”
“The clear talking point across the market today is that all eyes are now firmly fixed on next week’s RBA announcement,” Mr McMahon said.
“It’s becoming increasingly evident in our data that the prospect of a potential rate rise, combined with ongoing discussion around changes to capital gains tax, is beginning to weigh on consumer confidence.
Ray White NSW head of auctions David McMahon. Picture: John Fotiadis.
“When we look at bidder activity across the week, we averaged 2.4 registered bidders per auction – a figure that’s down 42 per cent year-on-year.”
Mr McMahon said that softer sentiment is being felt consistently across all markets, regardless of price point.
At the same time, Mr McMahon said they continue to see a higher proportion of properties transacting prior to auction, as both buyers and sellers look to secure outcomes before heading under the hammer.
“The encouraging takeaway, however, is that despite the uncertainty influencing buyer behaviour, the market continues to demonstrate resilience,” he said.
“We’re still seeing approximately 85 per cent of properties sell – whether that’s prior to auction, under the hammer, or shortly after – which highlights that committed buyers remain active when the right opportunity presents itself.”
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