Sydney property is booming again as spring listing numbers tank
Rampant housing demand fuelled by record low interest rates has drained Sydney’s supply of properties available for sale this spring and spawned another housing boom.
Listings numbers usually begin to increase over September, but this year they dropped 5.7 per cent for the month as a flood of new buyers entered the market, SQM Research figures revealed.
The buyers snapped up homes faster than sellers could replenish the market with new listings and there are now a fifth fewer properties available than there was at this time last year.
MORE: Boom is back for Sydney property prices
Homes selling $300k above guides
With little choice and strong competition from other home seekers, panicked buyers have bid up prices to secure homes, sending real estate values skyrocketing at a pace not seen since the last housing boom two years ago.
Sydney’s median home price soared 1.7 per cent last month — the biggest increase in two years — but there were even larger price jumps in regions such as the inner west, north shore and Ryde.
Prices in the inner west surged 5.2 per cent over the past three months, with 2.8 per cent growth in the past month alone, CoreLogic’s latest hedonic home value index showed.
Prices in the Ryde region increased an average of 2.9 per cent for the month and 4.1 per cent for the quarter.
There was also growth of just over 4 per cent for the quarter in the north shore, eastern suburbs, Sutherland Shire and the area surrounding the CBD.
These areas had some of the lowest stock levels in the city, especially for detached houses.
SQM Research director Louis Christopher said recent price rises were typical of a “boom” and more value growth could be expected now that credit was even cheaper.
The Reserve Bank announced on Tuesday that the cash rate would be cut to a historic low of 0.75 per cent, with most major banks passing on part of the savings.
Lower rates would encourage more people to begin shopping for homes, but they would have to fight for the tight supply of properties, suggesting prices would continue to grow over October and November, Mr Christopher said.
Sellers who took their properties to auction have been reaping the benefits of the tight listings environment.
Figures published Wednesday by auction house Cooley Auctions showed vendors sold their homes under the hammer for an average of nearly $400,000 more than they did in September last year.
The average price of properties sold at auction last year was about $1.1 million. Last month it was $1.51 million.
Standout sales included the $7.15 million paid under the hammer last week for a house on Fortescue St in inner west suburb Chiswick. The price was $400,000 above reserve.
On the northern beaches, five properties sold over the weekend for at least $300,000 over their guide prices, including a home on Surfside Ave in Avalon Beach, which changed hands for $500,000 above the guide.
Cooley Auctions director Damien Cooley said frantic sales conditions would continue until at least November, when there would be a slight bump in auction volumes as sellers rushed to offload their homes before the Christmas holidays.
THREE-MONTH PRICE INCREASES
Inner west 5.2%
North shore 4.9%
Eastern suburbs 4.5%
City + inner south 4.5%
Outer southwest 3.5%
*Greater Sydney 3.5%