Sydney Housing Market – July 2013
Tim Lawless provides us an immaculate housing market update through an RPData video. Australian capital cities are performing commendably and none better than Sydney. Yes, signals are not strong for areas like Brisbane, Hobart and Darwin but the euphoric mood is well and truly sustained by cities like Sydney and Melbourne.
Sydney is growing ‘fundamentally’
Sydney, according to Lawless, gives us maximum reasons to cheer as its fundamental/intrinsic growth criteria are well in place. Dwelling values have increased by 5.6%. This is phenomenal if you compare it to another smart performer, Melbourne, whose dwelling values have increased by 3.7% over the last year.
High auction clearances, low selling times
Auction clearance rates are very high and have brought a Prestige market turnaround. It is sticking to nearly 70% for the last 3 months.
Even the average selling time for homes has reduced by almost 33%. This year, houses are selling in 37 days compared to the figure of 55 days for last year.
Transaction volumes have spiked
Lawless reports that transaction volume has found a spring in its stride and Sydney has witnessed a spike in excess of 22% in comparison to last year. This is a brilliant piece of news for Sydney real estate, a great cause for continued optimism when you see Melbourne struggling at 7.5%.
Economists would also read expected erosion of rental yields as a positive sign. After all, it implies that value growth will have sprinted ahead of rental growth; a great sign for the long run.
Vendor discounts lesser than last year
Vendors do not mind trading at lesser discounts now; understanding well that the property equation in Sydney has come close to the fair-exchange (buyer-seller) scenario. Figure-wise the vendor discounts have come down from -6.4% to -5.3%.
Here is the RPData video:
Sydney Property Market is on the rise
The Sydney housing market is going to benefit immensely from macroeconomic developments like population growth ( addition of skilled working class) and government initiatives like low interest rates.
In my opinion, the Auction clearance rates, especially for the Prestige market, will rise even further; what with Asian investors taking a liking for Sydney.
The transaction volumes are in an early fall or consolidation phase and should not bottom out for a long time. If anything, they should surge even higher.
What are your personal expectations for the rest of 2013 and 2014?