The days of the bull run are over, said John, standing on the street in Redfern as we watched a tepid auction over a terrace not so much unfold, as haltingly and painfully reach some kind of an ending.
“The end of 2020 you’d have 400 people go through a house in half an hour before it was auctioned. You’d have 60 registered bidders, it was rapid fire and crazy,” he said.
John was filming this auction for a segment on the ABC 7pm news bulletin. And the story? A slowing market. It was the first weekend since the Reserve Bank raised interest rates by 25 basis points and there seemed to be, as they say, a vibe shift. Prices were still stratospheric, of course. But gone was the craziness, the prices climbing quickly until the house was millions over the reserve, the paddles in sweat-soaked paws and the dilated pupils, the weird feeding frenzy of trying to grab a piece of the hot market that seemed it would surge on forever.
I wanted this place to sell almost as much as the auctioneer. The family were inside, holding a bunch of flowers for the new owner – whoever that may be. In 1962 they bought the two-storey terrace for around $30,000, and it was now for sale for $2.5m. One daughter showed me a photo of her father Socrates after he purchased the house in the early 60s. He looked young and strong and was standing balanced on a fence like an acrobat. Now he emerged from a car looking like a Greek Logan Roy and was ushered inside.
I’d just come from a dud Newtown auction where the house was passed in at $1.5m, and only a few people loitered outside – including the tenants who said they had expected to be turfed out and had already found somewhere else to live.
Afterwards, I had a coffee with my friend Nick, who shook his head and cursed auctions. “It’s a horrible, horrible system – such a stressful process and results in you locking yourself into servitude for decades.”
Maybe not so much now. This weekend the Sydney clearance rate was 59% – down from 80% last October. But it had already dropped ahead of the RBA decision – perhaps in anticipation. It was 66% on the last weekend in March, and 56% last weekend.
Has the rate rise, small as it is, helped break the fever?
On to Redfern and a small crowd was shy.
“You need to bid to get it. Holding back is not a great strategy at auction,” said the auctioneer to around 15 people gathered outside.
Bids were going up slowly by thousand dollar lots. An old punk walked through the auction expressing his disgust at all of us – “Oh excuse me! Walking past an auction,” he said sarcastically, pointing at the house and saying “Woo hoo, an auction.”
“Better not put your hand up mate – you’ll be the owner soon,” said some wag in the crowd, breaking the tension and everyone laughed, and even the old punk smiled.
The Redfern house (which needed a lot of work) eventually sold for $2.876m.
Then on to Parramatta. This one – a three-bedroom house on a large block in a quiet street at $1.5m would surely attract plenty of bidders. I was willing to stake a $90 Uber trip on it.
But the atmosphere was funereal when I arrived. The agents were packing up their boards and flags. There were two registered bidders but neither showed up. The property was passed in. Agent Broderick Wright asked me if I wanted a lift to the station. We hopped into his new-model Mercedes and drove past a little gem he’d just sold that morning for $1.1m – a heritage two-bedroom cottage in central Parramatta. But as to the north Parramatta property that just got passed in? “It was surprising to me because we had two buyers who were registered to buy but they did not register to bid. Plus we have lots of stock on the market in the area.”
The owners were mum and dad investors who had once lived in the property but had moved to another part of Sydney. “There were a few other properties around that were at a lower price. Buyers are looking for reasons not to pay so much.”
As for his overall prediction, “whenever we see a slight change in the market [such a rate rise] we find properties that have challenges are the first to feel the pinch”.
But Wright was buoyant – yes, some mortgage holders will be affected “if they are already stretched to the limit, but if anything we’ll see a slight softening. We won’t see it fall off a cliff.”
Certainly not in Vaucluse – in Sydney’s east, where I went for my fourth, final and most controversial auction of the day.
Does the best street in Vaucluse make it the best street in Sydney? The auctioneer certainly thought so as he laughed off an opening bid of $4m for a lovely three-bedroom semi that had a deep wooden verandah and a copy of an Edith Wharton novel on the bedside table.
At $4m “I’ll take two bedrooms out and the parking – it’s very ambitious,” he said.
There were plenty of registered bidders but in the end it was a three-way competition, including someone taking bids via phone from London. The winning bid was recorded at $6.65m – but there was dissent from the back of the pack. People heard an underbidder put in $6.7m as the hammer dropped, but the chap was wearing a mask – so maybe wasn’t audible? A few us nearby conferred. Yes, we’d heard him bid – but what came first, the hammer or the bid? News Corp, which was also at the auction, reported the man had earlier declared “I’m out”.
The auctioneer confessed this scenario hadn’t happened to him before – definitely not in the last 10 years. The man who bid at $6.65m was already advancing confidently across the lawn to take the keys. The underbidder didn’t press it – but he was cranky. He took off by foot, in a huff along Sydney’s best street, no doubt cursing the crazy-making schema of auctions.
