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Where are the Sydney Housing Market Indicators Pointing?

auction clearanceCameron Kusher writes a piece for the website Property Update wherein he talks in depth about the Sydney housing market and what the present trends may mean. Kusher diagnoses the problem using nine indicators.

1. Values

While the home values in Sydney have come up by 17.6% over the last year, growth is showing signs of slowing down. Over August, growth has only been 1.1% and over the first 3 weeks of September, there has been a fall in value by -0.3%

2. Transactions

Compared to the second quarter of 2014, sales of detached dwellings have come down by -5.5% and units have come down by -16.5% this year.

3. Time on market

Homes are selling within 25 days of hitting the market and this is the fastest it has been in about a decade.

4. Auction clearance rates

Auction clearance rates have come down to 73.2%, a far cry from the 90% recorded in April. While the number of properties listed for auctions are very high this spring, the season hasn’t witnessed a rebound in clearance rates.

5. Listings

New listings are at their highest in the last 10 months and total listings are at their highest in the last nine months.

6. Mortgage activity

The mortgage activity is still at a high level but surprisingly, it has fallen by -2.0% at a time of the season when it always rises.

7. Housing Approvals

Housing approvals are sailing pretty high and there have been 15,213 detached dwelling approvals and 30,921 apartment unit approvals over 12 months leading to July 2015.

8. Housing Finance

Owner-occupier activity is getting stronger while investor activity is slowing down. While in July, the investors accounted for 62.4% of total lending, they only account for 58% at present.

9. Yields

With high capital growth and very sluggish growth in rental rate, Sydney’s yields have shown miserable figures.

You can read the original article here.

The article explains many things, quite in the Cameron Kusher way. Laid in front of us are the trends and it is not difficult to make out what certain tendencies may build into. High housing approvals is always heartening news and it remains to be seen how well we tidy up to the forecast of a housing shortage of 190,000 homes by 2024.