You know a city’s residential real estate market is on the boil when buyers turn out in droves on a weekend when the rest of the country is preoccupied with the conclusion of a hotly-contested political race.
Someone forgot to tell Sydney that we had a Federal Election last Saturday, it seems. While the rest of us trudged down to the local polling place, grabbing a sausage in bread on the way out from performing our democratic duty, folks in the New South Wales capital had other things on their mind.
“I’d avoid holding an auction on an election day, a footy grand final, during school holidays, over a long weekend or around Christmas and Easter,” a real estate agent friend once told me. I’d asked her about the dud sales periods, or those times of year when it’s nigh impossible to flog off a home.
While the election doesn’t hold nearly as much excitement as a sporting final or an extended trip to the coast, it is an event that captivates the nation. And once you’ve battled queues, heat and those enthusiastic party hacks thrusting how-to-vote flyers in your face, who could be bothered doing anything else?
So that’s why I expected the weekend’s auction clearance results to be flat, or uninteresting at the very least. Not so. Sydney is now undoubtedly in the midst of a property boom.
If you don’t like the word ‘boom’, let’s agree to call it an ‘enthusiastic, boom-like recovery’.
The city notched up a record 87.6 per cent clearance rate on Saturday, showing that buyers were about as frenzied as you’ll find. It was only seven days earlier that Sydney set a new record for homes sold under the hammer in a single weekend.
Australian Property Monitors senior economist Andrew Wilson told the Sydney Morning Herald that the “white-hot weekend” was a great start to the spring selling season.
“Buyers hungry for property are apparently paying whatever it takes to secure homes at auction,” he says. “With the spring selling season now under way, higher numbers of listings are set to come onto the auction market over coming months.”
We know that most capital city markets bottomed out around the middle of last year, finally beginning their long-awaited recoveries. Generally speaking, it’s been a case of slow and steady upward movement. Cumulatively, capital city house prices have lifted by seven per cent since the recovery began. Sydney has bucked that trend, as the best-performing market over the past 12 months.
Which suburbs are leading the city’s recovery? A quick look at data from Australian Property Monitors shows a mixed bag for houses with the biggest 12-month increase in their median prices.
The suburb of Rhodes recorded Sydney’s largest median house price increase in the past year – a whopping 84.2 per cent. Compare that to an average annual increase over five years of 8.2 per cent and it’s clear that activity and movement there is on the up.
Double Bay was a distant second with an increase in the past 12 months of 44.7 per cent, followed by the more afford Kew with a 42 per cent lift.
When it comes to units, the prestigious Point Piper pocket led the charge with a 58.5 per cent jump in the median price over the past 12 months, followed by Millers Point with a 44.1 per cent jump.
The outer northern suburb of Dural recorded the third largest increase in the past year, with a 36.7 per cent jump led largely by new attached dwelling development. North Willoughby, over the Harbour Bridge, was also a strong showing with a 32.9 per cent jump.
Another notable unit performers in the past year were Newtown, which has been the talk of the town along with other hot inner-western pockets, and saw a 18 per cent jump in its median price.
Sydney is the belle of the property ball at the moment and shows no signs of cooling down. In fact, experts tip this red hot market will only heat up as spring kicks along.
RP Data research director Tim Lawless says all signs point to continued strong sentiment and performance.
“In Sydney, listing numbers are about 28 per cent lower than a year ago. The lower effective supply levels are a result of fewer new listings being added to the market and a higher rate of absorption, with a 30 per cent increase in sales activity compared with a year ago.
“We’re already seeing a substantial increase in real estate agent activity across the RP Data platforms, which indicate a surge in pre-listing sales.”
Shannon Molloy is the deputy editor of Australian Property Investor magazine, www.apimagazine.com.au