Auctions feeling the pinch
Checks having impact
NEW data has revealed the impact that tighter lending checks for buyers is having on Geelong’s auction market this year.
The CoreLogic Quarterly Auction Market Report shows a 46 per cent clearance rate for the three months to the end of March. The volume of properties being auctioned fell to 267, down 58 per cent from last spring and half compared to the same time last year.
But an analysis of March quarter sales results showed a 20 per cent jump in the sale rate as buyers entered the market after auctions.
Buxton, Newtown agent Ben Riddle said the banks’ tighter lending requirements and the time lenders took to process loan applications was blocking more buyers from bidding unconditionally at auctions.
“We’re finding a high level of buyers are relying on the banks approving finance and it is getting more difficult,” he said. “People are still happy to engage and buy but they’re waiting for it to pass in so they can make their offers conditional on finance.”
East Geelong, Highton, Belmont and Newtown were the best auction suburbs this year, the data showed.
A breakdown by suburb showed an 83 per cent success rate in East Geelong, while 63 per cent of properties sold at or immediately after auction in Herne Hill and Highton.
Belmont was the biggest auction suburb, with a 60 per cent sale rate, while 54 per cent of auctions Newtown.
Lara and Geelong West were the worst-performing major auction suburbs, with 21 and 36 per cent success rates respectively.
Buxton, Highton agent David Gray said buyers were pushing out of more expensive inner suburbs to areas like East Geelong, Belmont and Highton because they provided better value for money.
“It’s become a very pricesucceeded in sensitive market, so it’s coming down to the conversations with vendors and their expectations and where they see the market,” Mr Gray said. “If they’re realistic, they’re often getting a better clearance rate.”
Barry Plant, Highton agent Kieron Hunter said the clearance rate needed to be seen in comparison to 2018’s boom market.
But the number of active buyers viewing properties showed a renewed confidence this year, with some homes attracting more than 75-100 groups in a matter of weeks, he said.
Mr Hunter said while owner-occupiers made up 60 to 70 per cent of the market, investors were being cautious and speculative buying had ceased.
“It’s back to normal, when you’re getting that sort of volume of people through auctions, im getting at least 15 through on weeknights,” he said.