Below is an extract below from the weekly property wrap from APM below, as winter auction clearance rates hit record levels.
Back in mid-2012, the commentators who’d forecast a price crash were saying that property owners in Sydney should be panicking because prices were flat and hadn’t responded to interest rates (they rarely respond immediately).
Now they will instead report that owners should panic because prices are going to boom and rise too fast.
I’m not sure I follow the logic, while prices in Sydney in income-adjusted terms remain below where they were a decade ago, yet the population is growing at an astonishing rate (yes, I’ve heard the argument that population growth doesn’t lead to dwelling price growth…one for another day).
Property owners would be wise to consider property as a 20-30 year investment rather than the housing bust predictions which will continue to surface every year.
Assuming that you chose to buy in Sydney in the first place because the population is booming more quickly than our collective ability to construct appropriate dwellings and infrastructure, then nowt has changed as far as I can tell.
[sam id=35 codes=’true’]We could do a lot better in this regard, but not while we maintain the ridiculous focus on affordability in inner-ring suburbs instead of how to promote better affordability, transport links and infrastructure in other parts of this vast country.
The inner west of Sydney is no longer recording the highest auction clearance rates which the low north shore and the city and east sectors now hitting sky-high levels which are likely to be reflected in price growth.
Based on the small sample of properties I’ve looked up, this is probably in part due to vendor expectations having jumped in the inner west…and perhaps some speculative sellers hoping for unrealistic prices.
Benign CPI forecasts imply that there is another interest rate cut in the pipeline which will do nothing to dampen investor activity.
Dr. Andrew Wilson of APM:
“The Sydney weekend auction market continues to strengthen towards record levels with Saturday clocking another year-high auction clearance rate.
After last weekend’s 81 per cent rate, the Sydney market reached new heights on Saturday with an 81.4 per cent of properties sold at auction.
The Sydney property market is tracking at levels not experienced at this time of the year since the house price boom of 2002.
Listing numbers this weekend were similar to last weekend’s with 306 properties auctioned compared to just 268 the same weekend last year.
The best regional result in Sydney this weekend was recorded on the lower north shore with a clearance rate of 92 per cent. The city and east and the south each recorded exceptionally strong 88 per cent clearance rates at the weekend with the northern beaches clearing 83 per cent of properties listed at auction.
Investors are an important ingredient of rising buyer activity in Sydney’s housing market. Last week the ABS reported an all-time monthly record of $3.9 billion in residential investor loans approved over May for NSW. Investor activity in the state currently accounts for nearly 52 per cent of all loans for house purchases.
Good news on the local economic front also last week with the ABS unemployment rate for Sydney remaining stable at a solid 5.1 per cent over June.Sydney’s housing market continues to move from strength to strength with strong house price growth set to follow the best clearance rates for years.”
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