May is typically a month where the property market starts to cool for the winter and the excitement of the auction circuit quietens down.
May 2014 saw this trend reversed as the second weekend of the month showed surprising results in the Eastern Suburbs and inner west.
The trend is typically that auction numbers are lower in winter. But the (Sydney) market has momentum, which will offset some seasonal factors in the coming months. The strong auction numbers are a by-product of a strong market, people are still trying to capitalise on that.’
Senior research analyst at RP Data, Cameron Kusher
One of the big winners of the weekend was an unassuming 5 bedroom house in Clovelly. Only metres from the beach, it could be generously described as a ‘renovators delight’. At hammer fall at 2.4 million dollars ($100,000 over reserve) – its fate has been sealed as ‘developers gold’. The property last traded in the 1970’s for a fraction of the price, but the value today lies in the location, not the building.
Similar stories were repeated around the inner west when a brick house in Strathfield smashed expectation, selling for $235,000 over the vendors reserve price. And an apartment in Bronte with ocean views sold at $385,000 over the reserve.
Each of these properties had one thing in common. Location. The rise of apartment complexes dominates the city fringe, creating a glut of affordable and convenient housing. Meanwhile, cashed up buyers and developers are looking for optimal lifestyle locations, picking off the ‘worst house in the best location’ properties for impressive prices.
The most desirable locations tend to continue spiralling up-wards as the overall standard of properties is improved over time. The fringe of these locations also starts to rise in line with the increased median price of the suburb.
When the location itself becomes more valuable than the building that is situated on it, it’s time to look elsewhere for the bargains.
A buyer’s agent can advise you on suburb trends and expected value. For more information contact Amanda on my Side.