Sydney’s property market, which was supposed to be cooling down after Easter, was back to its action-packed best on Saturday.
The initial auction numbers from Australian Property Monitors (APM) showed that there were 428 sales on 513 auctions for a 79% clearance in Sydney, just below the highs of earlier this year. RP Data reported a 76% clearance, still well up on last week’s 70% mark.
The city’s median also rose to $915,000, up from last week’s $860,000, which again, seems to contradict a widely reported market slowdown.
Endless summer and sales
Perhaps it’s the unseasonably warm weather but sellers hit the market in many of Sydney’s most popular suburbs on Saturday. Some of these had actually dropped off the weekly auction list of late but inner west favourites like Drummoyne, Leichhardt, Lilyfield, Gladesville, Lewisham and east side regulars such as Randwick and Coogee all returned with significant sales over the weekend.
Newtown, on the western side of the inner city, also had several notable sales in both the house and unit market. Two bedroom units there seem to be selling for a minimum of $700,000, as pricey houses in some Sydney suburbs.
Melbourne’s property market has continued to its recent hot streak too, with 624 sales on 824 auctions over the weekend for a 74% clearance rate, said APM. The median for the city has also held above $700,000 for the second week running.
Like Sydney, some of the suburbs that were turning over big sales in recent months but then briefly quietened, returned to the front of the pack on Saturday, including Glen Iris, Kew, Brunswick, Hawthorn, Camberwell, Ascot Vale, Bentleigh East, Malvern East, Reservoir and Preston.
Buyer demand is alive and well
Managing director of SQM Research, Louis Christopher says the numbers have generally picked up from the previous week and this shows that buyer demand is still strong, even though a bit of a slowdown has occurred lately.
“The one thing that’s been very unique over the course of the year to date is the sheer number of auction listings,” says Christopher. “The reality is that auction listings are double the amount recorded last year.
“So lots of property sellers are choosing the auction method as the way to go and yet overall sales listings are well down, particularly in Sydney at this time last year.”
Christopher says that due to the high volume of listings that we shouldn’t be surprised when clearance rates fall.
“I’m really cautious about reading too much into one weekend of numbers,” he says. “It is a bit of a break in the trend we’ve seen over the past five or six weeks, where clearance rates have been slowly coming off each weekend.”
RP Data’s housing market specialist, Robert Larocca agrees that the amount of homes listed for auction is the most important trend to consider right now.
“The increasing transaction volumes are a reflection of confidence in the market place,” says Larocca. “We’re not seeing what we see every other year, which is a reduction in the volume of auctions after Anzac Day.
“They [numbers] jump around on a week to week basis but there’s a sustained high level of auctions and that’s due to two things: one, the confidence of vendors and the second is that in a rising market real estate agents will show a preference toward auctions because they think they can better outcome.”
Both Christopher and Larocca expect continued strength in the property market.
Christopher says agents and developers he talks to on the ground in Sydney are still reporting solid demand.
“I think the evidence overall implies that demand is still very strong in Sydney,” he says. “I’m definitely not in the camp that believes that the boom is over.”
Private sales
It’s worth noting that auctions form just part of the real estate picture, with vendors in both Sydney and Melbourne also selling large numbers of homes privately. The median prices on these greatly differ as well. For example, there were 1,811 private house sales in Sydney in the four weeks to May 25 and the median price on these was $700,000, RP Data reports.
Meanwhile, in Melbourne, there were 1,555 private house sales at a median price of $485,000, which is dramatically cheaper than the city’s most recent median at auction.