Auction results strong, but rents slide for prestige property

Auction results strengthen this weekend just days after the Federal Government announced it would extend the increased first home owner grant for six months.

Melbourne recorded a clearance rate of 83% with 375 properties selling, well above last week’s 76%. Real Estate Industry of Victoria chief executive Enzo Raimondo said the result was “the strongest in the market since the end of the boom in 2007”.

In Sydney, the country’s biggest property market recorded a clearance result of 68%, just slightly down from last week’s 70%. Sales totalled $92 million, with 145 properties going under the hammer.

Brisbane clearance rates dropped from 47% to 38%, with 14 properties sold. In Adelaide, clearance rates jumped to 86%, with 12 properties selling out of 14 on the market.

Meanwhile, more properties in the country’s wealthiest suburbs are being made available for rent, as sellers of prestige homes opt to lease out their properties to avoid selling up.

But rents for high-end homes have fallen at least 25% due to oversupply, real estate agents have claimed.

Ray White leasing executive Lena Lahood told The Australian  that the number of properties for rent at Sydney’s harbourside Double Bay have jumped at least 25%.

“There are a lot who are trying to keep their home and are saying ‘take my executive property, rent it out’,” she said. “They are renting cheaper so they can move back when the doom and gloom is all over.”

Gold Coast-based real estate company Location Location property manager Margo Rush also said that the price of these properties has fallen, with a home renting for $1100 a few years ago now costing about $850.

“People are aware they don’t have to pay the same price any more, and are trying to negotiate the rent down with the owner.”

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