Residential property markets in Sydney and Melbourne continued to steam ahead at the weekend as home buyers pushed auction clearance rates in both cities to over 80 per cent, even as the Victorian government injected more stimulus into market, waiving stamp duty for first home buyers for homes worth up to $600,000.
The clearance rate in Melbourne hit 80.6 per cent, according to Domain figures. That result was achieved from a relatively large amount of auctions – 1183 listings – and it is the second week Melbourne clearances have pushed above 80 per cent.
Nor is there any sign of slowdown in buyer appetite in Sydney, where the clearance rate was at 80.5 per cent on CoreLogic figures. It is the fourth week in a row that clearances have hit 80 per cent or more in that market.
Among the highlights in Sydney, the Balmain home of academic Professor Richard Wright sold under the hammer for $6.1 million, well above its $5.5 million reserve.
Waterfront block
It's the first time the four-bedroom home, set on a large waterfront block of 600 square metres, has been put to the market in more than 50 years.
Sydney University's emeritus professor of anthropology, Professor is well-known in the field of forensic archaeology for his work on mass graves and human rights.
"It was such a privilege to sell such a rare and unique home for such an amazing man," said Belle Property Balmain co-principal Monique Dower, who handled the property with colleague Rita Lopresti.
"The sale price is a testament to the desirability of waterfronts in Balmain."
The strong results in Sydney and Melbourne comes in the same week that Paris-based OECD warned on Australia's vulnerability to a house price collapse.
SQM Research Louis Christopher said the weekend results showed that buyer demand was holding up even as more sellers come back into the market.
How long the market maintains its current pace was partly dependent on whether the bank regulator, the Australian Prudential Regulation Authority, steps in again to curb investor borrowing, Mr Christopher said.
"The probability is now increasing they may well come in before mid-year to press on the banks to put in even tighter restrictions," he said.
Lenders, such as Bankwest, a subsidiary of Commonwealth Bank of Australia, have already been moving to squeeze the amount and cost of credit available to investors.
Victorian move
In Victoria, the state government has abolished stamp duty for first home buyers for purchases below $600,000.
Those buying a home valued between $600,000 and $750,000 will also be eligible for a concession.
"The idea of the initiative is well-intended but I think it's going to be a disaster," said Wakelin Property Advisory's Paul Nugent.
"It's going to lead to tremendous capital growth in that sub-$600,000 sector. It basically becomes a grant to the vendors more so than the purchasers.
"First home buyers will leverage more off the ability to set the cost of stamp duty to one side and pay far more than any notional benefit of the reduction."
