402/320 Harris Street Pyrmont Auction
Why this apartment sold for $140,000 more than its neighbour did five months earlier
The property
Apartment 402 was marketed as a 1 bedroom, although, I would call it a studio as the bedroom could not be completely closed to the living area. It had a separate study, styled with a single bedroom but no window so really just a study. Plus 1 bathroom and 1 car space.
The apartment was warehouse style, large ceilings and great natural light. A lot of buyer appeal.
320 Harris Street as a building, is a reinvented wool store.
The property came to market with a standard 4 week campaign to be followed by an auction.
Initial price guide was $800,000 and did not change throughout the campaign.
The last 1 bedroom to sell in the building
302/320 Harris Street had sold just five months prior. Identical layout and aspect, the unit is immediately below 402. However, 302 was sold without a car space. This is definitely a valued commodity in Pyrmont and would turn a number of buyers off.
It sold in January 2023, before the market started demonstrating signs of a resurgence.
The Auction | ~10 registered bidders | 4 active bidders
The start
Auctioneer Alex Pattaro called for an opening bid and was met with nearly a minutes silence. With the room packed, it seemed that buyer’s were a little shy and looking for someone else to validate the value.
After a painful pause, the bidding opened at $800,000.
Not the most exciting auction, and definitely not the quickest. The auction ping ponged between bidder 1 and 2 in $20,000 increments to $900,000.
On the market
At the $900,000 mark the lead agent, Michael Catalano of True Property appeared to leave to seek vendor instructions that the reserve had been met.
Meantime, bidder 3 entered the race with a bid of $920,000. The property was called ‘on the market’.
The result
Bidder 4 made a one shot bid to try seal the deal at $930,000, but was rebutted by bidder 3 back at $940,000.
Six bidders had at this point not actively done anything during the auction. It is likely half them were of the false belief prices were still falling and the property would sell close to $800,000 like apartment 302 had months earlier.
The property sold to bidder 3 at $940,000.
Note: the reported sales price is listed as $893,000 due to 5% of the sale price being paid as GST (this is not common on residential transactions).
What this result says about the market
Stock levels
Stock on market in Pyrmont for apartments is down 8% year on year, which is effectively what has created an environment where you have ten registered bidders. They have no other options of properties to buy.
First home buyers
With pending changes to remove the annual stamp duty tax for first home buyers spending up to $1,500,000 due on 1 July 2023, there continues to be strong FHB activity.
Investors
There is also strong investor demand for these 1 bedroom apartments, with the rental yield up 30% year on year, and median weekly rent up 23% to $800. In my opinion, at least half the registered bidders appeared to be investors.
Interest rates
The Reserve Bank of Australia increased the cash rate by 0.25% just two weeks ago which, after taking a one month break in rate rises in April, did send a little shock through some buyers.
Overall
Only four registered actually bid and they did so cautiously. There was no bidding frenzy. It is likely at least five registered had no plans to pay more than $850,000.
The result shows that buyers are still sensitive to prices, not really accepting at this stage that it is no longer a buyer’s market.
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