First homebuyers pay $1m for villa as market reality sinks in for vendors

A young couple with a baby bought their first home in Bexley on Saturday, paying $1.05 million at auction.

All three registered bidders for the auction of the two-bedroom garden villa at 4/37 Verdun Street took part, though five buyers had been expected beforehand. All were first homebuyers, and the winning couple used the services of a buyer’s agent.

Bidding began at $899,000, with increments of $15,000 and $16,000 that slowed to $5000 and $6000. When the action stalled at $1,029,000, auctioneer Clarence White took instructions from the vendor. The leading bidder was invited to increase their bid to $1.05 million and the property sold.

The property had a guide of $950,000 and a reserve of $1.1 million. There is no legal requirement for a vendor’s reserve to be in line with their property’s price guide.

White described market conditions right now as “reasonably tough”.

“Registration numbers are lower and confidence has dropped,” he said. “I don’t think it is about the budget alone, it’s about fuel prices and interest rates as well.

“It’s a triple threat.”

PPD Real Estate sales agent Nate Chacon said that government measures to improve conditions for first homebuyers were having mixed results.

“We are seeing a lot of banks withdrawing pre-approvals, so [buyers] have less spending power to buy what they wanted,” he said. “But we’re also seeing less interest from investors and more activity from first homebuyers.”

The property was among 924 scheduled to go to auction in Sydney this week.

In Maroubra, a young family who thought they had been priced out of a beachside suburb won the keys to a three-bedroom house for $2.77 million.

The 11 registered bidders for 54 Broome Street were a mix of families and “flippers”. However, when the auction began with an opening bid of $2 million, it came down to three families to battle it out. Bids went up by $100,000, then increments of $50,000, $25,000 and finally $5000.

The property had a guide of $2.3 million, in line with the reserve. A sales agent for Olsen Romano Estate Agents, Corrinne Olsen, said the winning family had been looking for a property around Mascot because they didn’t think they could afford something close to the water.

“But given the market conditions, they thought they would give Maroubra a crack,” she said.

They plan to renovate before moving in.

Olsen said she had noticed a trend recently where buyers were “trying to control the market”, making opening bids well below the guide.

In another beachside suburb, a woman was the sole bidder for a two-bedroom apartment minutes from North Cronulla Beach, paying $1.1 million at auction.

Three bidders, including two first homebuyers, registered to bid for 17/10-14 Gosport Street, as an initial bid of $850,000 was rejected. A single woman, who had recently sold her Queensland investment property to fund the purchase, made an opening bid of $1 million. With no further bids, she was invited to bid a further $100,000, and the property sold for $50,000 less than the reserve.

The apartment had a guide of $1 million and a reserve of $1.15 million.

The new owner, who has been renting in Cronulla, plans to move into the apartment.

A sales agent for Pulse Property Agents, Luke Lombardi, said it was the fifth property he had sold at auction this week.

“They have been difficult, all of them, but it shows the market is not completely dead,” he said. “Vendors have started to realise [the market] is what it is, and they are adapting to the climate.”

Two weeks on from the federal government’s announced changes to negative gearing, Lombardi said some buyers were hedging their bets.

“The two buyers I had today were saying they will wait for the next few weeks and months, so there is some hesitation,” he said.

In Strathfield, a two-bedroom apartment 500 metres from the station passed in. Two parties registered to bid for the property at 8/70-74 The Boulevarde, but when the auction opened, no one raised their paddles.

The apartment had a guide of $750,000 and a reserve of $800,000.

A sales agent for Richard Matthews Real Estate, Jesse Di Loreto, said there was “a bit of a trend” now for buyers to wait for the property to pass in before negotiating a price.

“We have seen this with a few auctions,” he said. “As soon as the auction is over, everyone wants to have a conversation [to buy]. It’s a little bit frustrating, but it is [now] part of the process.”