MORTGAGEE SALES SLUMP TO EIGHT-YEAR LOW
Written on the 28 January 2015 by Jenna Rathbone
IF LAST weekend's Ray White auction is any indication, mortgagee sales of Gold Coast homes have fallen to their lowest level in eight years.
Distressed properties accounted for just 1 per cent of the program at The Event, the mega-auction staged annually in January by Ray White Surfers Paradise Group (RWSP).
The figure compared with 20 per cent this time last year and, according to RWSP CEO Andrew Bell (pictured below), is a clear sign that the Gold Coast property market is strengthening.
More than $20 million worth of Gold Coast property was sold under the hammer with more than 1000 people attending the auction including 243 registered bidders.
It was the best result for The Event in 22 years, with almost 60 per cent of 100 properties sold either on the day or prior to auction. Bell expects around a 90 per cent clearance rate as negotiations continue on a number or properties.
"One of the most notable changes this year was the absence of mortgagee stock in recent years mortgagee sales have comprised up to 20 per cent of our order of sale, this year there was just one property in the hands of receivers," says Bell.
"The last time we would have had mortgagees at this level was 2006 and 2007 but after that they rose rapidly.
"The properties that had run into default have all worked their way out of the system and the people who now have mortgages now very much have control."
Bell says mortgagee sales in recent years have held the broader property market back.
Prices achieved at The Event ranged from $96,000 for a studio apartment in the Outrigger at Surfers Paradise to $3.755 million for a three-bedroom penthouse at Nirvana by the Sea, Kirra (pictured).
Bell says the sale of prestige properties is still not as strong as the bottom end of the market and "that is natural".
"We always find that recoveries in real estate markets start in the lower price brackets and work their way through the system," he says.
"We are certainly starting to see more sales in higher brackets, but you would not yet describe that as a strong component of the market - I think we will see that happen throughout the course of this year."
Bell adds that investors dominated this year's auction with a strong presence of Melbourne and Sydney buyers, "which says a lot about market confidence and discretionary spending power".
"Those who may have steered clear of the Gold Coast a few years ago are seeing opportunities for growth and strong returns based on our low rental vacancy rate of less than 2 per cent.
"There is also a general feeling that Melbourne and Sydney have passed the top of the market so astute investors are looking north for better value."
Other properties sold include:
- A two bedroom, high floor apartment in the Soul building at Surfers Paradise for $905,000;
Author: Jenna Rathbone
About: Jenna Rathbone is a Queensland-based journalist who writes on a range of issues including business and property affairs and social issues.Connect via: Twitter