Sydney Property Market Update
By Rich Harvey, CEO and Founder www.propertybuyer.com.au
The first five months of 2013 has been a very strong start for the Sydney property market. Auction clearance rates have averaged over 70% since the start of the selling season in early February. Last weekend saw 300 properties up for auction and a very healthy clearance rate of 78%. Buyer sentiment is rising on the back of lower interest rates (now at historic lows) and pent up demand from aspiring home owners and investors. The strong auction clearance figures have not been this high since 2010.
Buyer sentiment has certainly regained its mojo with spirited and more competitive bidding at Sydney auctions. Sydney’s Inner West market has been one of the stand-out performers – last weekend saw the highest auction clearance rate at an eye-catching 87%. Many buyers are missing out because they don’t understand the changing market conditions or don’t undertake sufficient research to value their chosen property accurately.
The falling Australian dollar will help to make our local property more attractive to foreign investors and expats looking to buy their piece of the property market. While the dollar has been above parity, the volume of overseas buyers has been restricted.
The market typically tapers off in June as winter sets in, but with interest rates predicted to fall further, I expect to see the market heat up and build on the momentum created in the first half of the year. Listing volumes tend to dip in the winter months which results in a shortage of supply. With more buyers in the market this year, expect to see prices rise in response to ongoing and rising demand.
Since the Global Financial crisis in 2008, Australian Property Monitors estimate that Sydney house prices have risen a remarkable 18.8%. Sydney’s median house price currently stands at $673,000. Despite the rising median price over the last few years, some economists say that property is now at its most affordable level in years as falling interest rates mean less of a cash drain on the family budget.
The prestige property market is showing emerging signs of life, but has yet to see a significant resurgence in activity. Prestige agents are reporting stronger enquiry from wealthy Chinese buyers as well as buyers from the US, UK and parts of Europe. Two notable trophy sales in Sydney’s Eastern suburbs for “Altona” at $55 million and the “Bang and Olufsen” house for around $33 million by Chinese buyers have renewed confidence and set a positive tone for the year. A rising sharemarket is also likely to translate into further activity in the prestige market above the $3m range.
My team of buyers’ agents has noticed a considerable increase in this buyer sentiment this year. Many properties are selling before auction day, or from increased buyer’s competition on a private treaty purchase. We encourage all our clients to have their finances pre-approved and their deposit available in cash so they can jump on the right opportunity when it comes on the market.
This article was written by Rich Harvey, founder and Managing Director of propertybuyer, Sydney & Australia’s most awarded Buyers’ Agents. Propertybuyer helps property investors and home buyers search and negotiate the right property at the right price, everytime.
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