It’s summer in Australia, a period when property market activity tends to slow.
But not in 2017, and certainly not in Sydney.
It’s not just the weather that’s been hot lately in Australia’s biggest city — the housing market is scorching, with auction clearance rates and prices continuing to surge in early 2017, continuing the form seen the year earlier.
For several months the RBA has described house prices the city as rising “briskly”. On current form, that wording may require an upgrade if the tables from CoreLogic below are anything to go by.
Here’s the group’s Capital City Home Value Index, showing the percentage change in Australia’s capital city property prices over the past week, month and year.
Just have a look at Sydney. A stonking performance if there ever was one.
According to CoreLogic, prices in the city rose by 0.9% last week, taking the gain over the past month to 2.4%. The strong start to the year has seen prices in the city soar by an enormous 16.9% over the past 12 months.
It’s a hot market, and one that is certainly working for sellers right now, presuming they do not need to buy back into the market, of course.
That’s demonstrated in the latest batch of preliminary capital city auction clearance data from CoreLogic, shown below.
Sydney, as you would expect with the rampant house price growth seen in recent weeks, continues to stand head and shoulders above the rest, registering an elevated clearance rate of 84.8% last week based off results reported to CoreLogic.
Canberra and Melbourne — and off significantly lower volumes — came in a distant second and third place respectively.
And this final table goes some way, along with lower interest rates, to explaining why house prices in Sydney, and to a lesser degree Melbourne, have grown so fast over the past 12 months.
Stock available for sale is significantly lower that what it was at this point last year.
CoreLogic says there are currently 19,267 properties offered for sale in Sydney, down 11% on the levels seen a year ago. It’s a similar story for Melbourne where properties offered for sale are down 7.6% over the same period.
Demand is strong and supply — even with additional housing stock being built — remains tight. It’s putting a rocket under prices, particularly in Sydney.
It’s creating a conundrum for policymakers, and doing little to help housing affordability in the most populous cities in the country.
In many people’s minds, house prices in Sydney are now rising more than briskly.
Thankfully, if the RBA needs a suggestion on a more appropriate word to describe prices in the city, there’s plenty of suggestions available on Twitter to help it fill the void.
This Rozelle house had a price guide of $2.5m. Sold yesterday for $3m. Insanity. pic.twitter.com/FTL2a3GMBG
— Justin Fabo (@justinfabo) February 11, 2017
After several years of breakneck growth, seeing prices in Sydney double from the start of 2009, it’s likely that many of you will agree with that sentiment.