The 2019 spring selling season kicked off with some hype coming off the back of a surging winter market that recorded price growth, a record run of high auction clearance rates and a historically low level of supply. The enthusiastic buyer sentiment from winter spilled into September as buyers jockeyed to position themselves to secure the best listings that came onto the market. On a number of occasions, we recorded up to 20 buyer registrations at auctions for the most sought-after properties. There was also some consistency with the majority of auctioned properties selling above the set reserve. Overall, the Sydney market held firm with an auction clearance rate well above 75%, which typically reflects a sellers’ market.

With the limited supply of property coming onto the market, frustration remained among much of the buyer pool. When tracking sales volumes across Sydney over the last decade there is certainly a trend of fewer properties trading each year and 2019 looks set to be the lowest level of traded property recorded. This tight supply has only heightened buyer demand over this short period of time and potentially these dynamics may remain in play for the remainder of the year. As a result of fewer properties available to inspect, we are once again seeing many buyers pushing their search area far wider. This was certainly a hallmark of the booming market back in 2016/17 and here we are again. Not many predicted that the market would recover in such a quick timeframe and with such strength. We suggest that local values may have declined by about 15% in the market downturn, however, we have recovered somewhere between 5-10% of that in the past three months.

UBS released a report during the month citing that this mini housing boom will run out of steam and won’t have the financial strength of previous market recoveries. UBS noted that property sales turnover has collapsed around the country and this is triggering pressure on renovations, household consumables and construction approvals which is clamping down on construction and housing employment. Additionally, bank savings remain at the lowest level since 2007 while household debt-to-income ratio remains at a record high. These are all valid points and perhaps we will see the market start to level out in the coming months with more modest growth while interest rates remain low. In fact, this would be a good thing as double-digit house price growth places pressure on buyers to debt overload.

As we move deeper into spring we have some school holidays which may delay a few sellers from coming to market, however, we expect a steady stream of new property to come online throughout October. With an average of 16 buyers attending our open homes and loan approvals seeing strong growth through August and September, it may be a fait accompli that buyer demand will remain strong. If you’re after real insights into the market and your situation, please call our team today. With more than 25 years of local experience in every market condition, no-one is better placed to deliver accurate support.

Posted in Uncategorized on 1st October, 2019