This natural movement of the housing cycle shows it at 12 on the property clock as the market draws towards the end of the current growth phase.
Buyer activity is still extremely strong on the Northern Beaches with an auction clearance rate of over 78% last weekend. This graph shows the resurgence in clearance rates in 2016 climbing back to the all-time highs of the middle of last year.
Sydney-wide, 648 homes went to auction last week with a 70% clearance rate. The same weekend last year, 427 homes went to auction with nearly 85% sold.
I see Auction activity in Sydney continue to rise through to the Queen’s Birthday holiday break in June, which will signal the beginning of the seasonal quieter winter auction period.
There are just over 20,000 properties currently for sale in Sydney, however this is 11% more than this time in 2015. The increased supply is a factor in the slowing growth in the market.
So what’s on the cards for Sydney’s housing market long-term?
It is interesting to note that NSW lost 95,000 people to interstate migration in 2015, whilst Melbourne gained a further 95,000. Melbourne has now overtaken Sydney as Australia’s fastest growing city, and if this progression continues it will be our country’s largest city by 2056.
Housing affordability is still a major issue for many people in Sydney, with the average homebuyer priced out of 75% of the market.
This is spurring heated economic debate for policy changes, as it would appear home ownership is out of reach for younger people that will sadly become a generation of renters.
For those that have been fortunate enough to get into the property market I’m concerned at the debt levels that many families are inheriting. Australians’ mortgage debt has more than doubled over the last decade. This may not be an issue for now however once interest rates inevitably start to rise and if house prices were to fall, it would have severe implications on a mortgagees’ capacity to service their debt.
However while interest rates remain at all-time record lows and talk of another possible interest rate cut this year then the property market in Sydney will remain resilient.
The market keeps giving. Last week we sold this studio in Manly for a block record of its size in this complex. Astonishingly an identical property sold late last year by another agency for $110,000 less.
So if selling is on your radar you still may have not left your run too late.
Thanks for reading,