Sydney's property market sets a new clearance rate record, the second time in less than a month

BLACKTOWN, AUSTRALIA – FEBRUARY 14: Prospective buyers arrive for the auction for a four-bedroom house at 230 Blacktown Road on February 14, 2015 in Blacktown, Australia. Photo: Mark Metcalfe/ Getty.

Sydney’s auction market yesterday hit a new clearance rate record of 88.2%, beating the previous benchmark of 87.5% set less than a month ago.

Of the 737 auctions scheduled in Sydney, the Domain Group reports it had collected 599 results.

Domain senior economist, Dr Andrew Wilson, said the buying trend could see the local market even hit 90%.

“That would have been a completely outrageous suggestion but it’s now becoming more likely,” he said.

The highest price was for a six-bedroom house in Strathfield, which sold for $4.42 million.

Other top sales included a five-bedroom home in Newington, for $1,666,000, a three-bedroom Federation residence in Fairlight for $2,805,000 and a house in Haberfield for $3,965,000.

The record-breaking results however have economists torn on what is next for prices in the Sydney market, after experiencing a 12.4% surge in 2014.

Economic researchers BIS Shrapnel last month told The AFR that Sydney house prices will rise, expecting to see as much as a 20% increase over the next two years.

This would push the median house price well above $1 million by June 2017.

BIS Shrapnel suggested pent up demand, a push by investors into the market and an undersupply of new housing stock would be a driving the price surge.

Meanwhile just this week HSBC Australia chief economist Paul Bloxham said the opposite.

He told News Limited that he expects the Reserve Bank to hike interest rates in 2016, a move which would cool the booming market.

He said current prices are growing at an “unsustainable pace” and warned purchasers should expect a correction down the line.

HSBC is forecasting Sydney house prices to be broadly flat in 2016 rather than suffer a big fall.

Also this week, Business Insider discussed the boom in residential construction currently littering Australian cities’ skylines.

Referencing research notes from ANZ, David Scutt suggested that the change has almost entirely been driven by foreign investment in residential property. Read more about that here.

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