This year the Sydney housing market has taken off with auction clearance rates sitting at a three year high. The average clearance rate in Sydney is currently sitting at 70% with the highest of 78.6% recorded in May.
This momentum is being driven by record low interest rates (2.75%) and renewed buyer confidence. There is also a strong sentiment that this could be the last opportunity before the market really takes off.
Recent population figures have only served to highlight the existing shortfalls in Sydney’s housing supply, where the undersupply gap continues to grow. With an expected increase of 1.5 million people to be living in Sydney in 2031 this will fuel the demand for housing and with limited additional supply it will see prices in the foreseeable future being pushed upwards, for both renting and purchasing.
At the luxury end of the market there is heightened activity for properties over $10 million, both from international and local buyers. Only recently a house in Point Piper was sold for in excess of $50 million and a further two sold for in excess of $30 million, two of which were reportedly sold to Chinese buyers. With heavy restrictions in place on buying investment property in Singapore, Asia and Hong Kong we will see a stronger focus on Australia, and in particular Sydney.
Although there are clear indications that the luxury end of the market is moving it is not with the same impetus as properties sub $3 million. Properties in this range, if priced correctly, will and have been selling quickly.
What will be of interest is whether this energy will continue throughout the general election in September. In what typically is a ‘wait and see’ mode, with such high levels of pent up demand we may see a very different outcome.