A crowd gathers in Bellevue Hill for a flat listed at $950,000. But 25 bids later it’s sold for way more. Is it a ‘medieval’ process, or just the housing market?

On Saturday morning, 50 wary Sydneysiders gather for an auction in the city’s east. The two-bedroom apartment in the already pricey suburb of Bellevue Hill is listed at $950,000. It’s only 84 square metres but nobody trusts the estimates and it’s expected to go for more after a near-20% rise in prices in the past 12 months.

It is the last weekend before Easter and the Anzac Day breaks, and many homeseekers see this as their final chance before a long lull. In Sydney, an unprecedented 1,154 homes are up for auction – the city’s biggest day on record. In Melbourne the figure is 1,245, with both capital cities registering clearance rates above 80% for the past few weeks.

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Housing bubble or not, the auction in Bellevue Hill is emblematic of the forces driving prices so high. The small art deco apartment has attracted a diverse crowd: couples, singles, serious bidders and aspirants just looking to dip their toes into the water. Crucially, it appeals to families (close to schools and parks) as well as investors ($800 weekly rent).



The first bid is for $950,000, right on the guide price. The second takes it straight to $1m. A lot of potential buyers including Kurt and Toni, a British couple looking to get on the property ladder after 17 years in Australia, are instantly priced out, and never even get to bid.

Another taken out of the reckoning is James, who calls the auction process “medieval”.

“I’m a typical story of a 40-something Sydneysider, professional, looking for a property to live in, trying to buy my first home for me and my partner,” he says.



“An auction is an odd process, it’s very medieval. We’re just starting and this is our third. Every time we go to a new one, the price jumps and we’re like, ‘What? It’s only been a fortnight.’”

Facebook Twitter Pinterest Will at the Bellevue Hill auction: ‘You can’t, with decency, print how I feel about Sydney housing.’ Photograph: Mike Bowers/The Guardian

Meanwhile, the bidding is being driven by Will, a 27-year-old who is trying to buy somewhere with his girlfriend. They like the unit because it’s close to the train station and “easy for us to get to work”, but he says it’s hard to judge prices.

“I think a few years ago I would have been able to judge and give definite price estimates, but the last couple of auctions they’ve gone three or four hundred thousand above the price guide. Your guess is as good as mine.”

Still, after eight bids, the price is at $1.15m. Will has some competition from Ashley, a first-time buyer whose war chest has been boosted by an inheritance. She really wants the flat. It “ticks the right boxes. I looked at it three times – it’s gorgeous.” But her limit is $1.2m. As the price nears her maximum, she begins to tear up. On the 12th bid, Will pushes the price to $1.2m. Ashley bids an extra thousand on top, but Will bids again at $1.21m and she can’t go on.

By the 18th round, Will thinks he has clinched it with a bid of $1.245m. The auctioneer gets to three calls … and then Nicole enters. It is $1.25m, exactly 300,000 over the guide price. “Wouldn’t that rock your socks,” says the auctioneer to Will. “Almost had the keys in your hand.”

Facebook Twitter Pinterest Ashley watches on: ‘I looked at it three times – it’s gorgeous.’ Photograph: Mike Bowers/The Guardian

Nicole is an investor, spelling trouble for Will. “To me, owning property in Sydney is important because I think it’s security for the future. I own a place in Woollahra which I have just moved into, but this is for an investment. I actually used to rent the place next door to here. I haven’t looked at any other properties – I’ve been focused on this one based on the fact that I live next door.

Will and Nicole go down to the wire. Will gets three calls on his next bid – $1.255m but Nicole jumps back in at the last minute. “You’re gonna make me call it three times every time, aren’t you?” the auctioneer says.



Finally, the hammer comes down and Nicole wins on the 25th time of asking with a bid of $1.267m, $315,000 over the guide price and approximately $100,000 over reserve.

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The victor is sanguine about just having spent $15,083 on each square metre. “I absolutely expected it to go over the guide price, probably by about $200,000,” Nicole says. “Owning property is important but you’ve got to keep your head on, otherwise you’ll spend all your money on a home and have no disposable income.”

For the losers there is only the prospect of more auctions and Will says he’s straight off to look at another place. “Losing out is disappointing – maybe frustrating is a better word. You can’t, with decency, print how I feel about Sydney housing. But we’re still going. We’re going on to other inspections right now.”

It’s a tough market for buyers. Total sales for the weekend hit $760m for Sydney and $567m for Melbourne. By Sunday, the week’s median house price in Melbourne was $819,000. In Sydney it was $1.3m.

To Ashley, the auction might force her to rethink where she wants to live. “At the end of the day, $1.2m is ridiculous and even then for it go for $1.267m – that’s just insane. I don’t know if the bubble will burst, everyone has an opinion. I don’t know. It’s like Monopoly money. It seems insane to me but maybe the bubble hasn’t burst.



“But that’s life. It sold for what it sold for. You have to be philosophical.”