My auction experience on Saturday 8 May - North Kellyville

Hi there,

I haven't had too much experience with auctions because I have always bought as private sales for my investment properties.

However I went along with my brother and family just this Saturday for a property he was looking to buy in North Kellyville - a nice 4 bedroom house, not massive but a good home. He is looking for a PPOR (not investment).

Anyway, we went along and around 40-50 people showed up.. a number of young families and an older couple.

According to researching the area, I figured it would be good if we could get the property for around $1.35m or maybe max $1.4m

My brother's budget (pre-approved) was $1.5m.

So we walked around the house, then went outside for the auction. Around 5-6 formal bidders in total.

We were feeling confident about our chances and after the normal auction pre-ambles, the auctioneer asked if anyone wanted to bid. Everything went quiet, so the auctioneer said, how about we start at $1.5m? They got a bid accepted for $1.5m which then within 1 minute quickly got up to $1.6m.. obviously the $1.5m got busted immediately on the first bid and we all almost cracked up laughing because we may as well have gone home. But we stood around and anyway it got sold for $1.74 to what appeared to be an older retired couple within 30 seconds after that.

Show was over, and got to go back to the drawing board with my bro's purchase.

Anyway, here is the property that got sold - https://www.realestate.com.au/sold/property-house-nsw-north+kellyville-136051458

Here are my questions:
* Do you think this house is worth $1.74m?
* What are your thoughts on the North Kellyville and hills area in the coming months.
* Would you consider selling in this market, in the North West hills area?

Since Saturday I have reached out to agents to the area for an appraisal of one of the investments I own in the area (in Castle Hill specifically) - it got me thinking it might be a good time to sell, as the market looks to be crazy in the North West region.

Anyway, I recorded the whole auction on video and just watched it again now and it is hilarious, particularly during the opening 30-40 seconds where it opens bidding at $1.5m.

 

What was funny about it? Or is it just because your estimate was too low?

if you sell, what will you do with the money? And do you think it will fall?

those who sold in 2017 probably patted themselves on the back. Until....

 

Yes, because our estimate was too low. Way too low.

Well, I could use the money for other property investment opportunities, and other business purposes.

I don't know if it will fall. Keen to hear everyone's thoughts about Hills area (north west specifically), over next 6-12 months.

 

Also the fact we wasted our time.

According to PriceFinder, the house was worth ~ $1.2m.

Now I can understand how people are 'missing out'.

I thought people were just saying it but I saw it first hand how crazy things are - things are apparently even more insane in Eastern Suburbs and Northern Beaches according to folks I've been speaking with.

 

Makes sense to me.

 

my in laws place sold in Yagoona in late 19 . First bid was 100 K over the Expected value and took out at least 50 % of the 26 registered bidders . There was a very audible sigh that went through the crowd .....

Cliff

 

North West is gone crazy. Even the older side of Baulkham Hills and Winston Hills have gone bonkers.

There is no suburb in the "Hills" that is cheap. Heck even Northmead and surrounds are expensive as hell these days. Sydney will hit 1.5M median very very soon.

 

Never rely on an automated val tool when appraising property - especially in a rising market where exchanged sales aren't taken into consideration on these databases. The realistic appraisal prices are going to come from your own on-the-ground research (or a buyers agent) not from Domain Pricefinder or Core Logic (RPData) Even a quick comparison of nearby sales would have shown you that many sizable homes (most of them two storey and 500sqm+) in this area have been selling for $1.5m+ with single level smaller homes fetching $1.3m+ I have no doubt the property probably would have been underquoted, yet selling agents are very much aware of what houses are fetching in this part of the Hills.

As they inch closer to $2m (eg: check out 47 Barry Rd that nearly made it, selling for $1.92m) it's amazing so far this year.... quite extraordinary. We've not seen growth this fast in such a short period of time, and I've been on the ground buying for 16yrs as a BA for buyers. It's a very tough market, not helped by the media feeding the frenzy and a good dose of FOMO. I hope it calms down soon, and though there are some promising signs in some of the areas we work in (and a slightly lower auction clearance rate, with some properties taking longer to sell and others having to adjust initial price expectations) it's going to be quite a while for the comedown to take hold. With IRs still low and further govt intervention on allowing FHBs to access super, and single parents to buy with lower deposits, this may keep on fuelling the market. Time will tell.

In the meantime, I feel for your brother, along with all the other buyers in this price bracket. $1.5m very competitive right now, and having to go further and further afield to achieve, especially if you want something newer. I hope he finds something soon.

 

I have a client who was looking in Baulkham Hills around a 1.5-1.6mil figure. When their budget was hit even for a full reno job-type home they moved to WH and Northmead. Now those suburbs have auctions going for more than their budget.
I know that some people have given up looking for now. I can't see it continuing at the crazy prices as most who want to live there can't afford the high 1mils. Hard to crystal ball tho.

 

Yep Winston Hills is very very expensive now. Very very basic houses close to $1.5M now and something that's nicer and updated approaching $2M. Something very new is $2M+ already like this one.

https://www.realestate.com.au/sold/property-house-nsw-winston+hills-135659262

Recent open homes in Winston Hills absolutely packed. Northmead is not far behind. Constitution Hill is also a bit nuts as well.

Several sales in Toongabbie, Westmead, Pendle Hill, Girraween also well above $1M already as well. Crazy everywhere. Soon $1.5M wont even get you a basic 3 bedder in Western Sydney.

 

Certainly agree that we need to see what's actually occurring 'on the ground' in addition to the data.

Looks like Barry Road was sold via same company.

 

House was never going to sell under 1.5m. That was 12 months ago.

 

I don't understand why people are doing this, unless they expect the property market to fall back to what it was 6 months ago... Unless they are in jobs where they can save enough in a few months to put them back into the market, they are shooting themselves in the foot.

 

Nothing lasts forever and neither will this boom. FOMO is having a massive impact on the market and a lot of buyers are so eager to buy that they are completely forgetting to stop and analyze what they are actually buying. This behaviour, especially in an auction scenario is pushing the prices of some properties well above what they should be going for even after you allow for some price increase.

To buy now is to believe that prices will continue to rise even after the 20-30% they have already risen. If you don't believe that this can simply keep going then waiting 6 months makes perfect sense. Even if prices don't fall you will at least have time to review your options and get the best property your money can buy. Not just 'a property' for the sake of it.

 

I'd call it massive. 4 bedrooms, 3 living areas and a study.

But the block is pretty small and I still think North Kellyville is a bit out of the way, so yes, prices are definitely crazy.

 

This for me is insane - https://www.realestate.com.au/sold/property-house-nsw-kellyville-135909550

 

Problem is, what you believe doesn't influence what the market will do.
If you don't own anything, and decide not to buy now, are you willing to be able to afford even less in 6 months?
Those who already own can sit tight, but they would have made that buying decision at some point, either in a rising market (like now) or a falling one (and risked it falling even more).

 

Granted, buying at some point is certainly better than not buying at all but buying well into a rising market when everyone else is may not be the best time to do it. There isn't an infinite amount of first home buyers out there and once they either buy or give up it will be interesting to see what the prices do.

 

The best time is when it bottoms. Say 2018 or 2020. But while you can see it falling, the only way to identify the bottom is after the recovery starts.

Waiting to buy at the best time, for a fhb with minimal experience, is a delusion.