Nothing seems able to stop the Sydney housing market juggernaut

Photo: Don Arnold/Getty Images

Nothing, not even a lift in the number of properties going to auction, seems able to stop Sydney’s housing market juggernaut at present.

According to figures released by CoreLogic on Monday, the city achieved a preliminary auction clearance rate of 84.4% last week, the highest of any capital city across the country.

The elevated figure came despite a sharp lift in properties being taken to auction compared to earlier in Spring.

It was also well above the 60.2% level in the corresponding week in 2015, albeit on roughly 15% higher auction volumes.

Source: CoreLogic

The strength in the Sydney market, along with a 78.6% clearance rate being achieved in Melbourne, kept the national auction clearance rate above 70%, a level it has now stayed above for the past 14 weeks.

Last week came in at 77.6%, down marginally on the final figure of 78.1% in the prior week.

CoreLogic will release finalised figures for the week on Thursday.

Though auction volumes remain lower than this time last year — there were 2,246 properties last week, down on 2,547 a year earlier — the national clearance rate, like Sydney’s, was significantly above the 61.0% level 12 months ago.

The table below, from CoreLogic, looks at the performance of each capital city over the past week.

Fitting with elevated clearance rates and fewer properties being taken to auction, the strong result corresponded with a sharp increase in property prices over the week, led by a 1.5% surge in Melbourne.

CoreLogic’s capital city home value index jumped by 0.6% with all five mainland state capitals registering an increase for the week.

Alongside Melbourne’s sharp increase, prices in Brisbane rose by 0.5% while those in Sydney, Adelaide and Perth rose by a smaller 0.1%.

Despite the relatively modest gain in Sydney, prices in the city have surged 13.4% so far this year, outpacing an 11.8% increase in Melbourne.

Outside of Australia’s largest and most expensive capitals, prices in Brisbane and Adelaide increased by 3.6% and 3.3% over the same period while those in Perth, the capital most exposed to the fortunes of the mining sector, slumped by 6.3%.

Nationally, the index has risen by 9.1% year to date.

The strength in both data series comes just a day before the release of the Reserve Bank of Australia’s November monetary policy decision.

While a minority of economists believe that the RBA will cut the cash rate by a further 25 basis points to 1.25% at this meeting, the vast majority, including ANZ, believe that the bank will refrain from reducing interest rates in order to prevent even greater heat in the Sydney and Melbourne property markets.

The RBA rates decision will be announced at 2.30pm AEDT on Tuesday.

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