Sydney auction market records highest clearance rate in two months

The Sydney auction market strengthened at the weekend, recording its highest clearance rate in two months despite a surge in late winter listings.

Sydney reported a clearance rate of 73.7 per cent, which was well ahead of the 70.2 per cent last weekend but below than the boom-time 82.8 per cent reported over the same weekend last year.

Sydney auction numbers increased sharply at the weekend with 631 homes listed, compared to 501 the previous weekend and ahead of the 466 auctioned over the same weekend last year. Auction numbers next weekend are again set to exceed 600.

Sydney recorded a median auction price of $1,330,000 on Saturday which was higher than the $1,127,500 reported the previous weekend and 30.4 per cent lower than the $1,020,000 recorded over the same weekend last year. A total of $362.1 million worth of property was reported sold at auction in Sydney at the weekend.

Investors remain a key ingredient of the Sydney housing market despite recent actions by the financial regulator and banks to curtail activity from this group due to perceptions of supposed housing market risk.

Latest ABS data reports that the value of loans approved to residential investors in NSW over June surged by 2.3 per cent to $7.3 billion. This was the second highest monthly total ever recorded for the state and reflects continued strong appetite from investors attracted to rising prices and relatively high yields in a low yield economy.

NSW accounted for 49.3 per cent of all residential investor lending nationally with 58.5 per cent of all residential lending in NSW approved to investors – clearly the highest local investor market share of all the states.

Higher interest rates and tighter lending conditions have clearly failed to curb investors, who may be passing on higher costs to tenants in tight rental markets or securing finance from sources other than the major banks.

Performance was consistent across the city on the weekend with all regions reporting clearance rates above 60 per cent and most above 70 per cent. The lower north produced another strong result with 81.5 per cent followed by the south west well ahead of the previous weekend’s results at 79.2 per cent, the south 76.6 per cent, the north west 76.2 per cent, the city and east 75.9 per cent, the northern beaches 73.7 per cent, the upper north shore 73.3 per cent.