For the third week in a row Sydney’s property market had a clearance rate above 70%, with analysts forecasting a return to strength not seen since autumn 2010.
Australian Property Monitors reported a 72.7% clearance rate for the weekend, significantly higher than the 56.6% of properties sold in the corresponding weekend last year.
Analysts are growing steadily more confident the market may maintain these high numbers, but the real test will be over the Easter period, with thousands of houses up for grabs throughout Australia.
AMP senior economist Andrew Wilson told SmartCompany the period leading up to Easter will be a “strong, solid test for the market” in Melbourne and Sydney.
“In the two weeks leading up to Easter, in Melbourne, there are some strong auctions coming through with around 2,000 properties likely to be auctioned. The next fortnight will really reveal the consistency of the underlying strengths in the market. If we continue to get high 60s, 70s, it will look to have switched to a sellers’ market,” he says.
Wilson says Melbourne had a similarly good clearance rate over the weekend, considering it’s a long weekend, with 64% clearance for around 180 listings.
“It was still a good rate in terms of the ones which were offered, but it wasn’t a solid measure for the market.
“This figure is in the ball park, the boxes keep on getting ticked,” Wilson says.
The Real Estate Institute of Victoria is expecting 870 auctions next weekend and 1,210 in two weeks.
Last week, Melbourne and Sydney had clearance rates around 69%.
Urban Property Australia managing director Sam Tamblyn told SmartCompany the time between Labour Day and Easter in Melbourne is the best time to put a property on the market.
“I think there is quite a lot of activity in terms of interest, but it’s yet to really result on paper with properties actually being transacted. We’ve had about a month and a half of auction weekends, but we won’t really know for another month.
“Between Labour Day and Easter it’s the best time to put your property on the market. After Easter things seem to drop off for a week as people have gone away,” he says.
The most expensive property sold in Sydney this weekend, a four-bedroom home in Randwick (the city’s east), went for $2.9 million.
Wilson says the clearance rate of over 70% for Sydney is “extraordinary”.
“The 70+ clearance rate for Sydney is extraordinary; it’s tracking 20% higher than a year ago. Nine properties were sold over $2 million in Sydney this weekend, so it looks like the prestige market is picking up.
“But inner west Sydney had a clearance rate of 84% and also had the highest number of properties for grab,” he says.
Tamblyn says the prestige market in Melbourne and Sydney is taking longer to recover.
“I still think the prestige market is tied to the performance of the stock market and white collar jobs. The investment bankers, the lawyers and the high paying white collar jobs – people are still losing jobs in those areas. Until the market has a real rebound, the prestige market won’t have a rebound,” he says.
Tamblyn says from personal experience not much is on offer in the upper echelons of the market.
“I’m active in the market personally, but there’s still not a lot of great stuff out there. Up to $1.5 million is good but over $2 million it falls away,” he says.
The best performing areas in Melbourne, Tamblyn says, remain the inner city and the middle ring, but buyers should stay away from the outer suburbs.
Wilson says suburbs such as Ascot Vale, Reservoir and Lilydale are now performing better.
“In Melbourne, it was characterised last year by some of the pricey inner-city suburbs, but now we’re looking at the mid-priced eastern suburbs. They were quiet last year, but they’re doing better now and it’s a more of a generalised market this year.
“These areas are just starting to attract buyers as it’s that market which is generally more impacted upon by what’s happening in the local economy. The middle market is just getting more active and this is driven by the low interest rates. Affordability is probably at its peak in a lot of respects and confidence has risen, all markets are showing increased buyer activity,” he says.