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Sydney and Melbourne auction markets sizzle in heatwave

Sydney, Melbourne auction wrap

The hot weather doesn't seem to be putting off potential property buyers, with Sydney and Melbourne auction markets delivering strong results.

Sydney and Melbourne property auction markets have enjoyed some early season success, with both enjoying high clearance rates and volumes last week despite blistering temperatures on auction Saturday.

Buyers appear to be picking up where they left off at the end of 2016 following a few quieter weeks over the holidays, likely encouraged by the Reserve Bank of Australia’s decision to leave interest rates on hold.

Sydney came in hot last week with a preliminary clearance rate of almost 85% from 633 scheduled auctions, while Melbourne kept simmering at 75.4% from 542 auctions, according to CoreLogic. Sydney's clearance rate was up almost 7% compared with the same week last year, while Melbourne's was up 1%.

The weighted average clearance rate across the combined capitals was 76.6%. Canberra was above average at 80%, while Adelaide (72.3%), Brisbane (65.7%) and especially Perth (37.5%) were below. Adelaide was the only capital not to record a week-on-week increase in auction volumes. 

Looking forward to the week ahead, Domain predicts Sydney will play host to more than 700 auctions while Melbourne will have nearly 900. 

Melbourne highlights

A potential rebuild in Brighton East was the most expensive property reported sold at auction, going under the hammer for $1.920m. The existing home was built in the early 1950s with 4 bedrooms and an eat-in kitchen. Sitting on a 1,000sqm corner block, it has the potential to be split into two new homes.

In West Footscray a 1br brick unit with car space sold for $241,000, making it the most affordable property sold at auction last week. The unit came complete with a new kitchen and new bamboo floors.

Domain reports Melbourne's median auction price last week was $752,000. This was enough to net a 2br unit with parking in Camberwell, as well as a 3br unit in Airport West.

Sydney highlights

Sydney remains a tough market to enter for first home buyers or those with less than $500,000 to spend. The most affordable property reported sold was a 1br home in Faulconbridge in the Blue Mountains, about 75 kilometres from the CBD. The unrenovated cottage, sitting on 561sqm, went for $290,000.

Closer to the city, a small studio in Darlington with advertised rental potential of around $1260 a month fetched $420,000.

Sydney’s higher starting price is part of the reason the city's median auction price typically sits above Melbourne’s. Last week, Sydney recorded a median auction price of $1.2m, according to Domain. A 2br unit in Camperdown and a 3br, 259sqm Federation house in Earlwood both sold prior to auction for this amount.

The most expensive property reported sold at auction in Sydney was a 5br modern house in Strathfield that went for $4.175m. The home has a marble kitchen, in-ground pool and equipped home cinema. A 3br sub-penthouse in Milsons Point was the next in line, going under the hammer for $3.775m.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.