Dwelling prices are up 14.5% over the year, and a staggering 40.2% since June 2012.
Sydney's auction clearance rate has been tracking above 80% - 90% each week since the interest rate cut in February.
Another rate cut earlier this month has added even more fuel into one of the hottest seller's markets in Sydney for over a decade.
We are drawing huge crowds at our auctions and street records keep being broken.
We sold this home in Killarney Heights under the hammer for a street record of $1,725,000, whilst spirited bidding saw this investment home in Brookvale sell at auction last Saturday for a record $1,491,000.
And you know the market is red hot when an un-renovated home on the main road sells in Beacon Hill for $1,178,000, and we did it in just 10 days.
The average selling time is sitting comfortably inside a month at 26 days on average. This is 2 days quicker than in April 2014
What's even more confusing is that apart from Sydney and parts of Melbourne, property values across the rest of Australia are moving nowhere near to the levels of Sydney.
Sydney dwelling prices are now running the risk of overheating which could see a correction at the end of this cycle.
Approximately 60% of buyers in Sydney over the past year have been made up by investors as they borrow money at ridiculously low levels, chasing very quick capital gains.
However as rental yields drop, along with tighter lending conditions forced onto to the banks by APRA on investment lending, I see a house of cards ready to fall as these buyers drop out of the market, or are forced to do so by the banks lending restrictions.
Now I don't want to come across as an alarmist however something eventually has to give. We cannot have Sydney property prices rise by 40% while wages only increase by 3%.
The question is when?
Take a look at this graph, which shows there has been no major crash in values since data began to be collected in 1965.
The most significant correction was a 9% dip in Sydney prices between March 2004 and December 2005.
As you can see, property values rise then slump for a while, then they retrace and finally go into the next expansionary phase.
Currently, what we are experiencing is the normal machinations of the property cycle.
My bet is that sometime in 2015 we will see the Sydney market peak.
As buyer sediment shifts, demand decreases, investors retreat and history repeats itself. Then we will experience a correction in property prices.
By how much, only time will tell.
So if selling is on your radar then this is the year to act. And ONE final word of advice. Please don't let me tell you in the near future I told you so!
Thanks for reading,