Weekend clearance rates have soared above 80% in Sydney for the first time in more than three years, as analysts say the market is continuing to outperform Melbourne.
Low interest rates have continued to attract buyers to the market, with Australian Property Monitors’ figures showing clearance rates in Sydney reached 81% on Saturday.
While Sydney is tracking around 20% higher than this time last year, Melbourne is also up around 10%, with clearance rates on Saturday hitting 63.4%.
Australian Property Monitors chief economist Andrew Wilson told SmartCompany the Melbourne property market has historically been stronger than Sydney’s.
“This year Sydney has been tracking consistently higher than Melbourne, but when you look at the markets over a number of years, Melbourne would usually have higher clearance rates when the market is in the same stage.
“Melbourne has been a stronger market than Sydney generally, so this shows the strength of the Sydney market at the moment. The Melbourne market would be described as solid,” he says.
Wilson says there are a number of reasons why Sydney has had a stronger recovery, but overall both markets are tracking well.
“Unemployment is currently higher in Melbourne than Sydney and there have also been concerns [about] the manufacturing sector in Melbourne. These factors can have a dampening effect,” he says.
This time last year, Sydney recorded a clearance rate of 56%, while Melbourne was slightly higher at 57.4%.
Wilson says despite this weekend’s strong results, listing numbers are still weak because of the winter school holiday period.
“The quieter July market means listings were about 300 on the weekend. This is slightly higher than last year’s numbers and it’s a trend that has been improving in recent weeks, so there is no surprise we got over 80% in Sydney,” he says.
Earlier this year listings were consistently around 700 dwellings each week, with busy weeks in Melbourne exceeding 1000 homes and units.
Wilson says the results this year have been consistent and this weekend’s rates show the “continuing positivity in the local market”, as a result of low interest rates.
Despite the improved market, Wilson says there are still no signs of improvement in Sydney’s prestige sector.
“We still had no signs on the weekend of any lift in sales over $2 million.
“In Sydney, this is seen with homes in the Lower North Shore and the Eastern suburbs, it’s still the missing factor in Sydney, but properties in the $1 million to $1.5 million range are well sought after and selling well,” he says.
Loan data released last week from the Australian Bureau of Statistics also reflects improvements in the market, with the figures showing the number of dwelling commitments for the purchase of new dwellings was up 3.6% in May.
The percentage of first home buyers also increased, rising from 14.3% in April to 14.6% in May.
According to Australian Property Monitors, the most expensive property in Sydney over the weekend went for $2.35 million and was a four bedroom home in Randwick, while the cheapest was a two bedroom property in Wamberal which sold for $320,000.
In Melbourne, the most expensive property, a four bedroom house in Oakleigh, sold for $1.755 million, while the cheapest was a one bedroom unit in Alphington which went for $252,500.