While we have been discussing and obsessing over auction clearance rates, has anyone noticed that property prices are not falling, well at least in our area.
Sales like $1.8mil for a house with “water glimpses” at 54 Water Street, South Caringbah, $1.7mil for a 2 bed apartment at 4/1-3 Tullimbar Rd, Cronulla and $798,000 for 4 bedroom house at 14 Burleigh Ave, North Caringbah. These are all great prices; all achieved in the last month with average clearance rates of 30%-40%.
This week our clearance rate was up slightly at 44% with Sydney wide dropping to 48.3%.
So what does all this mean? Interest rates are going up, prices are going up, and clearance rates are dropping. I am not an economist but from my 1st year Uni course, I think this means inflation is still a problem. Does anyone else think that interest rate increases are maybe not having the desired effect?
All the talk is about interest rates this week, from the Sunrise morning show to the shop owners in Cronulla, to the Australian Financial Review. Today, Kochie from the Sunrise morning show raced over to the Reserve bank during the show to hand in emails from struggling families who, like the rest of us, are wondering why the Reserve Bank had to hit us again when we are all hurting already.
Last weeks rate rise has seen the papers talking “doom and gloom”, “consumer confidence down to 15 year low”, “looming recession” etc.
But the hard reality of it all is seen closer to home with “Wellbeing”, the popular health food chain closing its doors this week in Cronulla and staff suddenly finding themselves jobless.
As to your questions on the blog regarding how auction results have been affected I would say they have been dramatically affected by the rate rises. There are now people who have very large mortgages and are paying 9% or more. How can auctions and real estate not be affected? Many mortgagees have had 12 consecutive rate rises. Who would have anticipated that? Everyone is now cutting back, hopefully we won’t have to give up our daily cappuccinos because that would be really depressing.
The sun was shining but the 1st day of autumn certainly had a chilling affect to the auction results. Both mid week auctions passed in and Saturday 1st March saw only 1 property sold at auction, a 2 bedroom apartment in the Tradewinds, in South Cronulla which sold for $620,000. Luckily 3 properties sold prior to auction day and 1 property sold soon after the auction – another 2 bedroom apartment in South Cronulla. So the stats for this week are 5 sold, 10 passed in or cancelled thus a clearance rate of 33.3%. It seems interest rate rises have started to have a very noticeable impact.
With the week starting with Caringbah residents receiving news that Caringbah South was now an official suburb things were looking very bright. A huge 21 auctions were scheduled for Thursday 21st Feb and Saturday 23rd Feb up from 6 auctions the week before. This was a trend across Sydney with the SMH for Saturday 23rd February reporting about 500 properties across Sydney being scheduled for auction on the weekend – “the biggest February auction day on record”. Unfortunately the success stats were much lower for our area with an approx clearance rate of 30% (Sydney wide – 56.7%) Only 6 out of the 21 properties were sold at auction/sold prior or soon after the auction. Beach & Bay Realty was very pleased then to have our only property up for auction this week sell prior – 4/1-3 Tullimbar Rd, Cronulla Nth for $1.7mill.
There were 6 properties that went to auction on Saturday in our focus area, 2 were cancelled, 1 sold prior, 3 passed in and 2 of these sold soon after the auction. According to the Sun Herald Domain (17.02.08), Sydney wide there were 223 auctions and a clearance rate of 51.9%. This week we are tracking 21 auctions! Just to confirm Beach & Bay is covering the suburbs of Cronulla, Burraneer, Woolooware, Caringbah, Dolans Bay, Lilli Pilli and Port Hacking. For ease of reference we have divided the suburbs of Cronulla, Woolooware and Caringbah into north and south, with the dividing road being Kingsway. We are not saying these properties are in Cronulla South or Cronulla North for example, but to make it easier and quicker to for users to search. More suburbs to follow…
Saturday, 9th February,2008 saw the first auction of the year in our focus area with 5 Pervical St, Caringbah South attracting a great crowd despite the rain. Bidding kicked off at $600,000 and with approx 4 bidders the property sold very quickly under the hammer for $800,000(2 bed fibro on 700m2 approx). It seems the interest rate hike earlier in the week does not seem to have deterred buyers in the area. According to the Sun Herald Domain (10.02.08) there were 115 properties that went to auction in Sydney on Saturday 9th Feb with a clearance rate of 57.9. We only had one Auction in our focus area to track this week but stay tuned as the next few weeks are looking very busy, in particular the weekend of the 23rd Feb where 19 auctions are scheduled.