Properties in Sydney are seemingly being snapped up as quickly as they hit the market, as a new development 22 kilometres north-west of the Sydney CBD sold out on Saturday – the first day it was offered to buyers.
Local buyers purchased all 130 apartments at the Beecroft Place development on Saturday, according to CBRE director Murray Woods.
It comes amid continued scrutiny of the heated Sydney market and rising Sydney house prices.
Woods told SmartCompany the $116 million development, due for completion in mid-2017, had attracted buyers because of its location to amenities and shortage of stock in Beecroft.
“The situation with Beecroft is that it is a very lowly supplied location, there are no sites here,” says Woods.
He says he had expected a strong interest in the development, but the sell-out result was even greater than anticipated.
Woods says Sydney buyers are coming to understand the lack of supply in some local markets.
“The market understands the dynamics of property now, they fully understand the supply constraints,” he says.
The keen buyers on Saturday included a mix of investors, downsizers and first home buyers, according to Woods.
“I think [first home buyers] can still afford to buy,” says Woods, when asked about the increasing concerns younger buyers are being priced out of Sydney.
“In some instance [first home buyers] will need to reduce their expectation. Buying what you can afford versus what you want, every one has needs and wants, but if they are being pragmatic, there is plenty of product in the market for them.”
Sydney reached another stellar clearance of 83.9% on 847 properties at the weekend, while Melbourne logged a solid 79.2% on 1047 homes under the hammer, according to RP Data.
The national average clearance was 77.7%, considerably higher than the same period last year when 65.4% of homes were sold at auction.
Cameron Kusher, senior economist for CoreLogic RP Data, told SmartCompany most capital cities are notching clearances notably higher than last year, with the exception of Perth.
“Sydney has continuously seen above 80% every week since the interest rate cut, while Melbourne has been tracking around the high 70’s,” says Kusher.
“Moving into winter there will be fewer auctions, but whether clearance rates will decline, we will see. I suggest they will remain fairly similar, although there will be fewer of them.”
“The big test will be spring, but with low interest rates and people wanting to buy, I don’t see anything changing,” he says.
Kusher also says he is unsurprised by the result at Beecroft.
“It’s no at all surprising. But the thing to remember with developments is there is a long presale process, with advertising and contacting databases beforehand,” he says.
“I think most are pretty consistently selling out right now. It’s not like in a slower maker where there’s a presale release for six months and they sell enough to secure construction and keep selling while it’s being built. There is so much demand in Sydney at the moment it’s pretty easy to lock away those buyer as they release stock.”