Sydney property market at decade highs

Editorial director of Switzer
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The Sydney property market is experiencing strength not seen in over a decade, with four regions in the NSW state capital showing initial weekend clearance rates of 100%.

Buyers might have been slightly distracted by the election, with only 200 properties going under the hammer in Sydney, but the overall clearance rate of 87.6% (see table 1 below) indicates they are almost willing to pay whatever sellers are offering.

“It seems that Sydney property buyers can’t get enough property at the moment,” APM senior economist, Andrew Wilson, says.

“The last time we had a market this strong [in Sydney] was 2001/2002.”

Regarding the four regions that sold all of the properties that were on auction, Wilson says it has been a very long time since that has happened.

“It was the first weekend of Spring and I guess the market couldn’t have got off to a better start to the Spring season.”

A record August

The weekend auction clearance rates in August this year, ended up totalling a monthly rate of approximately 76%, according to Wilson. He says that was the fourth highest rate for a month in Sydney ever, and the highest rate recorded for the month of August in Sydney. APM has been collecting data since the early 1980s.

Melbourne is also catching up to Sydney, with consistent improving clearance rates.

“[76.6%] was quite a solid strong result. Melbourne has started giving some signs of ticking up to the next level,” Wilson says.

Although oversupply in the CBD area of Melbourne is still an issue, the broader and suburban markets are doing well.

“There is certainly no secret there is a lot of new apartments on the market [in the CBD] and they are struggling,” Wilson says of the southern capital.

The revised rate for the previous week was a solid 72.2% for Melbourne (see table 2 below).

This time a year ago, both Sydney and Melbourne couldn’t even get above the 60% mark (see table 3 below). A lot has happened in the past 12 months and with Sydney leading the way, Wilson says this is the best start to Spring we’ve had since 2009.

“It’s the low interest rates that are doing it. That has certainly activated buyers and momentum,” he says.

90% prediction

It is still a two-speed market though in many cities including Sydney, with less activity in the higher end.

“We’re still pretty quiet at the top end of town,” Wilson says.

“The prestige market is still struggling.”

Wilson is reluctant to predict 90% clearance rates but does say: “If you can get nine out of 10 or more properties being sold at auction…that’s absolutely extraordinary.”

With the first Super Saturday of Spring just two weeks away, that may not be totally out of the question. We predict that if it doesn’t get to the 90% mark in Sydney, it will get damn pretty close.

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