Four out of five Warrnambool homes auctioned on a cold Queen's Birthday Saturday have sold under the hammer, in a sign the local market is holding steady in the face of rising interest rates.
The pick of the bunch was a five-bedroom home on Lynden Grove in the inner east, which boasted stunning views along the Hopkins River and out to sea.
They turned out to be million-dollar views, as three local bidders among a 30-strong crowd tussled for the prestige property. Bidding started at $900,000, rising quickly to $950,000 before hitting $1 million. It then rose in ten thousands to $1,040,000 before creeping to the final price of $1,075,000.
All three bidders had been planning to move into the house and both the owners and new buyers were happy with the final price, which was towards the top of the expected range of $990,000 to $1,089,000.
An hour later in an auction across the river in the growing Hopkins Heights estate, a solid crowd of 40 people braved the wintry conditions to watch two local bidders compete for a four-bedroom house on Motang Drive.
Bidding opened at $750,000 and inched up to $775,000 before a third local bidder swooped in over the phone - Ray White agent Fergus Torpy said the bidder phoned in because they were stuck in COVID isolation - with a power bid of $810,000, which torpedoed the hopes of the other two house hunters.
"That was a good result, right at the top of the range," Mr Torpy said.
"That one drew the best crowd of the day, I think because there haven't been a lot of auctions in that Hopkins Heights estate, so people are really curious to see what things go for."
Mr Torpy said the winning bidders were an older family looking to move straight into the 18-month-old house.
In north Warrnambool a single bidder managed to bid against themselves and nab a practically brand new house.
The nine-month-old property was in Yarra Drive in the Riverland estate on the banks of the Merri River and the small crowd of around a dozen people only drew one bidder.
Ray White agent Jason Thwaites said after a vendor bid the bidder offered a figure in the low-$600,000s, which the owners weren't happy with.
"At that point we paused the auction and spoke with the owners. Then the bidder increased their offer and kept increasing it until it met the owner's expectation," Mr Thwaites said.
The final price of $650,000 was "bang in the middle of the expected range of $630,000 to $680,000", he said.
Mr Thwaites said he thought the Warrnambool market would stay solid thanks to the limited supply of houses and the lag time on new builds.
In Tylden Street, Dennington, two investors battled it out for a four-bedroom mid-century brick house on 927 square metres.
The bidding opened at $400,000 in front of a crowd of 25 people, going back and forth between a local and a Melbourne-based buyer. The Warrnambool investor won out, with the sale price of $463,000 just over the top of the expected range of $440,000 to $460,000.
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Mr Torpy said the segment of the market at or just below the median price still offered good value to buy and rent out, which was why both bidders were investors. He said despite interest rates rising, the tight rental market still meant new landlords would see a return on investment at the lower end of the market.
The one failure from Ray White's five long-weekend auctions was a three-bedroom house in Lava Street, which passed in without registering a bid.
A vendor bid of $580,000 didn't entice the crowd, despite a couple of interested parties, but Mr Torpy said he was confident the property would sell privately very soon.
"There has been ongoing interest from a particular group, so it will go back on the market for private sale, we just haven't confirmed the price yet," he said.
The 888-square-metre property had a listed range of $630,000 to $690,000 and Mr Torpy said it had a lot of upside, but required a little bit of work to flourish, which may have made people more hesitant.
"I wasn't too surprised, because we knew the level of activity and interest beforehand and had a sense it might not be sold under the hammer, but that there'd be some conditional interest," he said.
"It's got a lot of scope and potential and the house has some nice character features to it, but people have to weigh up the lag time to getting builders and the cost of materials. That's all heavily inflated at the moment, so there are a few denominators there for people to consider."
Mr Torpy said he didn't expect the interest rate hikes to have a drastic effect on the local market, which had come off its stratospheric highs but remained steady.
"What we're seeing is a bit of a tightening. There will still be good prices out there, it just may not be to the unbelievable level we've seen the past couple of years," he said.
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