Sydney property prices just keep on growing, with real estate values (houses and apartments combined) up 11.3% between January & November, according to the latest RP Data report.
With about six weeks to go in the selling season, it looks like price growth for the year will be slightly off the rate of 2013, but still very strong.
Last year, Sydney property values grew by 14.5% and this year we’re up to 12.1% with the traditionally strong month of November still to go.
I think a little more price growth is inevitable, given the insatiable appetite of Spring buyers right now.
Clearance rates have consistently hovered around 80% for months on end, which is a clear indication of great confidence in the marketplace today.
Our company has booked a record 1,003 auctions across the group with an estimated value to exceed $1 billion for November, an increase of 21% on the previous record of 829 auctions in November 2013.
Eighty percent of the properties to be auctioned will be in the $750,000 to $3 million segment of the market, with the highest concentration of the 835 metro properties to be auctioned in Sydney’s Eastern Suburbs, Inner West and North West.
Added to this, 11 offices out of 62 in our network, clocked record sales figures for October.
I believe these outstanding results in October, and record number of auctions in November, refute those who say that the market has run out of steam.
To the contrary, we’re seeing the strength of the metro market spill over to regional areas, as buyers recognise some great buying opportunities and value for money, both for investors and owner-occupiers.
Regional NSW is seeing an upsurge of activity, with some city buyers looking for more affordable options in great lifestyle locations with new found equity, as their city properties have increased in value over the past two years.
As we approach Christmas, we’re looking at a situation where Sydney property prices will be about 25% higher, compared to just two years ago. We’ve seen this sort of growth before at the start of new cycles.
That doesn’t mean the growth cycle is over. But we’ve had a real boom period for the first two years and that can’t go on indefinitely. Things will slow down, prices will stabilise and growth will occur at a slower pace.
If there’s one thing for sure, you can’t have growth like this forever and with record auction listings, it is likely that clearance rates will moderate across the board.
Selling in a boom period like this, is one of the best ways to maximise your property’s sale price. Waiting for more growth will probably result in you selling after the market begins to waver; or we get hit with that first interest rate rise.
If 3-6 months is the timeframe you have in mind, I encourage you to start the process now. The really good agents won’t take on more stock than they can handle, so don’t assume you can wait til next year to book the best salesperson in your area.
The best auctioneers can’t be in two places at once, so don’t miss out on your preferred dates because you didn’t get organised quickly enough.
I know many of our agents at McGrath are already booking February and March campaigns, so don’t leave it til next year.
While Sydney will inevitably slow down at some point; South-East Queensland is going to ramp up.
In our latest McGrath Report, I predicted growth in South-East Queensland will be at least double the growth of Sydney values over the next few years and all the signs are there that this process is about to begin.
Brisbane/Gold Coast values have risen by only 3.7% in 2014 and you can buy an average house for about $480,000 compared to Sydney’s $792,000 and Melbourne’s $615,000. The opportunity is there right now, and I can’t emphasise this enough.
Buyers move in herds. Few people take the opportunity to buy before the market moves.
They draw confidence from waiting to see others buying first; that’s when we see a critical mass forming and a boom situation usually follows.
If you bought a million-dollar property in Sydney two years ago, you would be a quarter of a million dollars richer today, because property prices have moved up 25%.
It won’t be long before we’ll be talking about Brisbane, the Gold Coast and the broader South East Queensland region in the same way.
I’ve been doing this for a long time and South-East Queensland could not be more ripe for the picking. Why not combine your Christmas vacation with a little on-the-ground research up north?
November will see the last surge in prices before we finish up for the year – good luck out there!