Standen Report for March 2021
The first quarter of this year has proved a phenomenal one for the Sydney market and it’s certainly the hot topic of the moment. After national dwelling values rose to record highs in February, the momentum has continued throughout March with further growth forecast over the next six to eight months.
With Sydney’s median house price hovering between 1 and 1.2 million, just how high can prices go? There are predictions that Sydney is set to experience its strongest growth since the 1980s, with values to soar by as much as 17 percent. Other forecasts are a little more conservative – around the six percent mark. So, the usual variances are there depending on who you talk to.
Auction clearance rates, too, appear to be unstoppable – reaching record heights in recent weeks – a little under 90 percent in many parts of Sydney. That’s compared to just 38 percent for the same time last year. One or two suburbs have even been achieving a 100 percent clearance rate!
These rates are driven by consistently low stock levels and increased buyer demand. Less stock of course means more competition for fewer properties.
When that happens, you get extraordinary results with homes selling substantially above reserve in some cases. There have also been examples of houses in the same street selling at a huge price difference just weeks apart. This is as much to do with a jump in new loan commitments and ongoing low interest rates as it is with a lack of housing stock. In fact, indications are the Reserve Bank is unlikely to increase rates before 2024.
There’s a simple explanation for the current price gains – along with those historic low interest rates, there’s easier credit availability and an influx of first homebuyers. It will only take tightened lending, wage growth and an interest rate hike to stall buyer activity, effectively putting the brakes on the current boom.
Yes, it’s a sellers’ market and cashed up buyers are making their presence felt, but the Sydney market is unpredictable at best, as the last 12 months have shown. Whether you’re buying or selling, seeking professional expert advice is more important now than ever. At Standen Estate Agents, we know the local market and can help you navigate your property journey. Myself and my team are always here to assist.
I’m Tavis Standen of Standen Estate Agents. Thanks for joining me.