Sydney's hot property market is showing few signs of slowing heading into summer

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Auction clearance rates in Sydney, Australia’s largest and most expensive housing market, remain as hot as ever.

And house prices in the city have now risen by close to 15% this year.

A “brisk” increase indeed, to use the description offered by the Reserve Bank of Australia earlier this month.

According to preliminary figures released by CoreLogic on Monday, the city recorded an auction clearance rate of 84.2% last week, continuing the strength seen since the middle of the year.

Reflective of relentless demand and fewer properties being put up for sale, the figure was well above the 58% level reported in the same corresponding week a year ago.

The strength in Sydney’s auction market, along with a strong result for Melbourne, which recorded a preliminary clearance rate of 77.2%, saw the national figure lift to 77.5%, up from 73.6% in the prior week.

“The two largest auction markets, Melbourne and Sydney, continue to skew the capital city weighted average higher, with both cities consistently recording an auction clearance rate higher than 70 per cent throughout spring,” said CoreLogic.

Source: CoreLogic

Fitting with the strength in auction clearance rates, house prices across the country continued to lift last week, led yet again by Sydney.

CoreLogic’s capital city home value change index rose by 0.3%, leaving the gain in 2016 at 9.9%.

Price in Sydney jumped by 0.5%, leaving the increase this year at an eye-watering 14.4%.

Elsewhere prices in Adelaide grew by 0.5%, 0.4% in Brisbane and 0.1% apiece in Perth and Melbourne.

Despite registering a modest increase last week, prices in Melbourne — thought to be the other market where the RBA believes prices are rising “briskly” — has seen the median dwelling price jump by 12.4% this year.

Source: CoreLogic

Writing last week, Tapas Strickland, an economist from the National Australia Bank’s markets division, said that strong house price growth and very high auction clearance rates in Sydney and Melbourne, along with a renewed acceleration in investor lending, challenged “the RBA’s assertion that risks in the housing market have moderated”.

According to CoreLogic, recent strength in Sydney and Melbourne will be put to the test in the weeks ahead as auction volumes increase.

“Late November and early December have historically shown the highest number of auctions,” says the group. “As the number of auctions trends higher over the coming weeks, the larger stock levels will provide a timely test of the auction markets strength.”

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