The major cities have continued to record strong property results, with auction clearance rates in Sydney now reaching their strongest in three years.
Figures from Australian Property Monitors for the weekend show a clearance rate of 78.1% for Sydney, although this could lower slightly when all the weekend results have been reported.
Out of the 408 listed properties up for grabs in Sydney, 244 have been reported so far and, of those, 200 properties have sold.
In Melbourne, the Real Estate Institute of Victoria reported a clearance rate of 71%. Out of the 670 auctions listed with the REIV this weekend, 475 sold and 195 were passed in.
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Clearance rates for both Melbourne and Sydney have been consistently high this year and APM chief economist Andrew Wilson told SmartCompany auction rates are the best they’ve been in recent years.
“This was the strongest weekend auction clearance rate in Sydney for three years and we’re now tracking just below those very strong years of the 2010 real estate boom and before that 2002 and 2003,” he says.
Wilson says while the property markets in Melbourne and Sydney are both strong, they are responding to different factors, accounting for some disparities.
“The Melbourne market is operating more generally with most sectors getting the benefit of increased confidence. The middle is getting more active, as the top end has driven it from its depths last year.
“Property investors and the middle market buyers in Sydney are driving the trend. The Sydney investor market is very strong and it’s at very high levels historically, while Melbourne is more of a generalised type of activity with owner-occupiers being the key drivers,” he says.
Wilson says Melbourne buyers are looking to the “leafy inner-city” suburbs, while the Sydney market is being greatly influenced by more investor activity.
Australian Bureau of Statistics figures reveal loans to property investors increased by 16% in 2012, while owner-occupier loans only grew by 6.6%.
Wilson says the Sydney prestige market, generally considered properties above $2 million, is still not performing on par with the rest of the market.
“But sales of properties between $1 million and $2 million are strengthening, particularly on Sydney’s lower and upper north shore,” he says.
Before Easter, analysts were cautious as to whether the early signs of a market pick-up would remain, but Wilson says there’s no sign it’s slowing down.
“We’re now tracking at record levels and the market is continuing to gain momentum,” he says.