Sydney property market fall finally bottoming out as stock shortage drives up prices
Sydney house price plunge is finally bottoming out with the latest property data suggesting sellers in the city’s pricier regions are already benefiting from the emerging recovery.
And estate agents agreed yesterday’s signal from the Reserve Bank governor Philip Lowe that home loan rates are set to stay low — and could fall even further — will further boost buyer confidence.
MORE: Buyers flocking back at unprecedented levels
Critical shortage of stock on northern beaches
Buying in the winter market has been problematic due to a scarcity of sellers, with auction listings down by 25 per cent as homeowners haven’t wanted to sell in the wake of the 15 per cent price declines of the past two years.
This in turn has meant that early bird sellers have attracted a larger pool of buyers, which is driving up prices, particularly in more affluent suburbs.
The market leader is the northern beaches, where sellers secured a 93 per cent clearance rate last weekend at a median sale price of $2.1 million.
Three months ago the clearance rate was 57 per cent at a median of $1.4 million.
One of the success stories from the weekend was an original 1950s cottage in North Balgowlah which fetched $1.51 million under the hammer after having a guide of $1.3 million.
The property, untraded in nearly five decades, was marketed as a knock down.
Inner west auctions had a $1.6 million median and an 80 per cent clearance rate. In April it was $1.46 million with a 64 per cent success rate in the inner west.
CoreLogic’s head of research Cameron Kusher said last month the premium housing sector downfall has started to slow.
“The most expensive segment of the market is seeing its rate of decline slow,” Kusher said.
“It is still early days, but with the housing market expected to trough in late 2019, the premium housing sector may find a floor first and start to show some level of recovery before the other segments.”
Yesterday Mr Lowe, who has dropped the cash rate in consecutive meetings to a historic one per cent, signalled the RBA would go even further if necessary. “Whether or not further monetary easing is needed, it is reasonable to expect an extended period of low interest rates,” he added.
SIGN UP TO THE NSW REAL ESTATE NEWSLETTER
He told the annual Anika Foundation address in Sydney that although the economy’s overall fundamentals remained strong, the RBA was prepared to produce faster growth by taking the official cash rate below current levels.
Louis Christopher at SQM Research anticipates Sydney can claw back the four per cent declines from the first half of 2019 in the next six months.
“We should make that four per cent up in my view, or very close to it.”