Couple who both work as teachers admit they’re worried after buying dated Australian house for $3.7MILLION – but here’s why they got a bargain
- House in Sydney coastal suburb sold for $200,000 less than the reserve price
- Threat of interest rate rise and house price tumble has deterred homebuyers
- Property prices fell for the first time in years in some major cities in Australia
A house in Sydney’s eastern suburbs has fetched only $3.7million after failing to sell at auction with buyers concerned about overpaying as real estate prices tumble.
Only two groups registered as buyers during the auction of the 1968 five-bedroom home at 183 Boyce Road in Maroubra on Saturday.
The bidding opened up $100,000 below the price guide at $3.5million and only reached $3.6million despite a reserve of $3.9million.
Buyer Grace Wen later bought the home for $3,709,000 during post-auction negotiations.
Sydney house prices have fallen for the first time since the start of the pandemic with interest rate rises looming on the horizon and deterring some buyers.
A house in Sydney’s ritzy eastern suburbs has fetched only $3.7million after failing to sell at auction with buyers concerned about overpaying as real estate prices tumble
Only two groups registered as buyers during the auction of the 1968 five-bedroom home at 183 Boyce Road in Maroubra on Saturday
Ms Wen and her partner, who are both teachers, said there was the added concern of overpaying with bank valuations of homes coming in beneath purchase prices.
‘If the interest rate goes back up, we should be OK … we were more worried about the 20 per cent deposit,’ she told Sydney Morning Herald.
‘Some of the houses in Maroubra and Kensington, their valuations were not as high as what people paid for them.
‘For example, [a friend] bought a house for $4.6 million in Kensington, but her valuation only came up as $4.2 million.’
PropTrack Home Price Index released a report showing real estate prices had taken a hit in some capital cities.
Property values fell by 0.1 per cent in Sydney and 0.44 per cent in Hobart in April.
PropTrack economist Paul Ryan blamed two factors on the fluctuating real estate market.
‘Firstly we just have seen such extraordinary growth over the past two years, it just couldn’t continue and it’s finally caught up with the increase in borrowing costs,’ he told news.com.au.
‘There’s also a sharper inflation increase than expected which means interest rate hikes.
The bidding opened up $100,000 below the price guide at $3.5million and only reached $3.6million despite a reserve of $3.9million
Buyer Grace Wen later bought the home for $3,709,000 during post-auction negotiations
‘Six months ago we were still debating if interest rates would go up in 2023 and 2024 and now expectations are that interest rates will increase by between one and two percentage points by the end of the year.’
Reserve Bank of Australia (RBA) analysis showed house prices could fall by 15 per cent when interest rates rise.
House prices have continued to rise in other major cities with Darwin doing the best and recording a 0.53 per cent uptick.
Perth came in second with a 0.45 per cent growth, Adelaide at 0.34 per cent and Brisbane at 0.22.
The ACT recorded the lowest at 0.04 per cent, then Melbourne at 0.05 per cent.
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