Bidding Wars Continue to Skyrocket Prices Over Sydney Reserves

March 31st, 2015

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As the NSW Government and NSW Fair Trading crack down on house price underquoting, the number of houses being sold for thousands of dollars above their reserve continues to soar.

Just this month, the Sunday Telegraph revealed that NSW Fair Trading will be presenting a case in Parramatta Court against BresicWhitney, who they say clearly advertised prices below the official estimates they had given to two sellers in Double Bay and Surry Hill. In the case of Double Bay, the published price guidance was advertised as $1.5 million, the agency agreement was set at a low $1.6 million, and the 1950s apartment reportedly sold for $1.79 million.

Also this month, Premier Mike Baird declared “the practice of underquoting has to end”. According to news.com.au, the premier has stated he is tired of watching home-buyers waste their time and money acquiring strata and building inspections when they have “no chance of actually acquiring this property”.

In the current market, agents say they cannot possibly dictate how much people are willing to spend on the day. Selling agent Allan Micallef of Raine & Horne Mascot/Rosebery said “The market is what it is”. However, professional buyers offer a different perspective. Chris Curtis – Principal of buyers’ agents Curtis Associates – is unsympathetic, saying that if buyers really do their research and truly understand the market, a vendor’s price guides should be irrelevant.

Curtis asks “Why should a seller’s agent be any better informed or qualified than a well researched and professionally represented buyer to know what a property will sell for? This is a storm in a teacup that might make a good pre-election headline, but misses the fundamental point that the real problem is the poor and selective quality of currently available property data”.

Recent examples of homes achieving high over the estimated price include:

51 Doncaster Ave, Kensington – This 1950s three-bedroom, one bathroom house on 405 sqm sold for $1.92 million, $320,000 over the set reserve. This came after another home in the street sold for $570,000 more than the set reserve earlier in the week. This particular home attracted 27 bidders, and was eventually sold for $2.17 million.

29 Myrtle St, Chippendale – This three-bedroom dilapidated Chippendale terrace sold for $1.455 million, despite an initial price guide of $1.15-$1.2 million. Bidding started at $800,000.

8 Trafalgar St, Bronte – Located on two separate titles spanning 580 sqm, this three-bedroom Bronte house sold for $3.35 million. Just two people registered to bid on the very run down bungalow, but both were impressed by the position, big block, and north facing orientation. The median price for the suburb is $2,262,500, however the area has seen a growth of 15.1% over the last 12 months.

24 Leonard Ave, Kingsford – A deceased estate, this unrenovated family home sold for $1.83 million, despite a reserve of $1.7 million. The three-bedroom brick home that’s near Anzac Pde and the University of NSW attracted a big crowd, with 11 bidders keen to snap up the freestanding house.