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Fiscal cliff 'rumblings' play out in property market

Despite being on the cusp of spring, Melbourne's housing market remained on ice over the weekend as the lockdown continued.

In Sydney, house-hunters were out in force, although this did not necessarily translate into bullish sales results.

Just 39 per cent of the 100-odd Melbourne homes scheduled for auction sold, compared with a clearance rate of 68 per cent in Sydney, where 88 homes were scheduled for auction.

Canberra recorded an 81 per cent clearance rate from 46 auctions. In Brisbane, 63 per cent of the 55 homes scheduled for auction were sold.

In Sydney, several properties that sold at or before the auction during the week changed hands for less than they did several years ago, indicating that cautious buyers were forcing the hands of some homeowners.

A two-bedroom warehouse apartment in the inner-city suburb of Surry Hills sold before auction for $1.37 million, despite having sold just two years earlier for $1.5 million.

Another two-bedroom apartment in Darlinghurst sold before its auction for $1,595,000 having last traded in 2017 – at the peak of the market – for $1,650,000.

Property consultant and buyer's agent Edwin Almeida said some properties were undoubtedly achieving strong results but buyers, who were more informed than ever and less emotional at auctions, generally had the upper hand.

"There are sales that have blown me away on both sides of the fence. A property I thought would sell for $1.4 million sold for $1.7 million and then another property I thought would sell for $1.5 million to $1.6 million only sold for $1.3 million," Mr Almeida said.

"The properties achieving strong prices are those that have been done up and are being showcased very well ... on the other hand, you've got homes that have been renovated and people are desperate to sell and they are the ones being sold below the 2017 purchase prices.

"Buyers are doing a lot more due diligence, they are not just relying on what agent guides are telling them," he said.

"There is less and less participation at auctions and a lot more hesitancy. A lot of people, a lot of foreigners, were previously just being guided by the agents and paying silly dollars for properties."

Mr Almeida said that in the past few weeks, he had seen the "rumblings" of an expected September fiscal cliff playing out in the housing market.

"I'm seeing the pre-earthquake shockwaves coming through. Spring starts next week, so it's a 'watch and see'," he said.

"If listings increase by two to three properties per suburbs, that would be about another 1500 to 1800 properties across Sydney ... that doesn't sound like a lot but it would have huge ramifications on the market."

This warehouse apartment in Sydney's Surry Hills sold for $1.37 million It last sold for $1.5 million in 2017.

In Melbourne, the market was largely "on pause". Under the strict lockdown conditions, buyers were unable to leave their homes to inspect properties.

Buyer's agent Julie DeBondt-Barker, of Property Home Base, said most of the properties that sold during the week would have from been marketing campaigns that had been dragged out and the buyers would have done their inspections before the lockdown began.

"I wouldn't think those properties that sold on the weekend were good stories," she said.

"A giant pause button has been hit. Prices for anything under $700,000 are still holding because first home buyers are there in force right now, they are just locked down," Ms DeBondt-Barker said.

"We have at least a dozen first home buyers on hold because they can't inspect or buy.

"Above that, there has already been [downwards] price movement by at least 5 per cent in my view and I could see another 5 to 10 per cent depending on where it is and where it is and when."

However, real estate agency Ray White remained bullish about the “resilient” Victorian market.

“Buyers remain out in force and prepared to bid and offer in excess of owners' expectations to secure one of a lower number of listings available,” Ray White Victoria chief executive Stephen Dullens said.

The group took six properties in Victoria to auction over the weekend, and five of those sold.

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