Sydney property: low auction numbers and rising clearance rates will lead to price rises, say experts
Sydney property prices are set to rise, experts predict, if the current run of higher auction clearance rates continue.
Buoyed by low volumes and rising confidence, the Harbour City had the highest auction clearance rates in the nation last week with preliminary figures of more than 80 per cent in some regions.
With so little on the market, similar figures are tipped for tomorrow’s auctions.
Sydney’s overall preliminary clearance rate last week was 78.2 per cent — last year often less than half those put up for auction were selling.
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Should clearance rates above 70 per cent continue, CoreLogic auctions commentator Kevin Brogan said “we could see prices rise a bit”; realestate.com.au chief economist Nerida Conisbee said “we do expect prices to rise” and My Housing Market chief economist Dr Andrew Wilson said “higher clearance rates mean higher prices”.
Yet no-one is predicting a return to the boom and the price rises are expected to be confined to inner-suburban and premium areas.
CoreLogic’s latest data showed a 0.1 per cent rise in home values for Sydney in June, although monthly figures can be volatile.
But with just 352 auctions scheduled, last week’s clearance rates were particularly strong.
The strongest Sydney region was the city and inner south at 87.8 per cent, followed by Ryde at 85 per cent, the eastern suburbs at 82.1 per cent and the inner west at 81.5 per cent.
Mr Brogan expects similarly strong figures this week due to the shortage of properties on the market and improving confidence.
“We’ve got a total of 297 auctions for the entire week due to the school holidays,” Mr Brogan said.
“We’ve had an increase in confidence since the election, rate cuts and the banks are able to lend more … people are looking to buy sooner rather than later.”
Most vendors are now waiting for spring which means those who are selling now are in the box seat.
BresicWhitney’s Michael Kirk has five bidders pre-registered for a five-bedroom terrace at 625 Bourke St, Surry Hills, tomorrow that has a $2.4 million price guide.
Along with the improved market, he says its proximity to the light rail is attractive to buyers.
“Now that it’s nearing completion, people are starting to see the appeal,” Mr Kirk said.
The three-level terrace has been converted to two apartments and has a rooftop with city views.
It’s appealing to investors who can collect $1,850 a week a week — $900 upstairs and $950 downstairs, which has the bonus of off-street parking.
Meanwhile, the Agency’s Fraser Turvey is quietly confident of a sale for a one-bedroom apartment with parking in the Republic block at 514/50 Burton St.
The price guide is $960,000.
“There’s generally more confidence since the election and there’s very little on the market,” Mr Turvey said.
He’s got interest from first home buyers, parents buying for their children and investors.