Gretchen Friemann | AFR | August 27, 2012
House prices in some of the nation’s wealthiest suburbs are likely to decline throughout the crucial spring selling season as concerns at faltering economic growth keep a lid on demand.
The prediction is despite stronger than anticipated auction clearance rates at the weekend, with Sydney hitting 62.6 per cent, according to Australian Property Monitors data after 223 homes went under the hammer.
Melbourne also posted a robust result, finishing the week on 66 per cent from a total of 516 auctions. However the uptick in sales is concentrated in the middle to lower end of the residential market, where buyers have been spurred on by lower property prices and successive interest rate cuts.
For trophy home owners, the pain looks set to intensify. Byron Rose, head of the Sydney-based buyers’ agency Rose & Jones, said house prices in the city’s coveted eastern suburbs remained under pressure and could dip another 10?per cent this year.
One agent, who preferred to remain anonymous, claimed owners wanting to sell were clinging to over-ambitious values and needed to adopt a more realistic approach.
Few people are enthusiastically embracing that advice. In June, neighbours of Coalition frontbencher Malcolm Turnbull, and his wife Lucy, sold their property at 16 Longworth Avenue in Point Piper for $13.5 million, dashing expectations of a sale at $18 million. The property, owned by developer George Snow and his wife Sabrina, is due to be settled soon but had been on the market for a year.
Melbourne’s affluent areas are also in distress, according to David Morell of buyer agency Morell & Koren. He said “motivated” sellers were stomaching 15 to 20 per cent discounts.
Mal James, another buyer agent, said that one in five properties were selling at auction, and forecast a limp spring season in the city’s $2 million-plus price bracket.