The 2014 property market kicked off powerfully, with clearance rates on the weekend in Melbourne and Sydney reaching the record-breaking heights recorded in spring last year.
Listing numbers started low for the first week of the season, but are predicted to pick up in the coming weeks.
Sydney recorded a clearance rate of 80.3%, while 73.6% of houses in Melbourne sold, according to Australian Property Monitors.
The numbers show a continuing of the confidence which typified the market in 2013.
APM senior economist Andrew Wilson told SmartCompany the real strength of the market will be seen in the next few weeks when listing numbers skyrocket.
“As expected listing numbers were a little low, but there were some interesting trends in terms of where the market finished last year and where it started this year, there was a great similarity between the two,” he says.
“You expect the market to pick up where it left off last year. If anything I’d say Melbourne’s trend was down slightly, so it looks like it may have peaked in November.”
In Sydney, 95 properties were up for grabs over the weekend, while in Melbourne there were 72.
“There will be very big numbers in Sydney over the next two to three weeks,” Wilson says.
“In Sydney there will be about 30% more auctions than this time last year and in Melbourne it will be up around 20%. This reflects the confidence in the market and perhaps there are buyers who purchased properties in spring last year now putting their houses on the market.”
House prices boomed in 2013 and over the weekend the median value of homes for sale had increased significantly.
This time last year Sydney recorded a median auction house price of $585,000, while over the weekend that price has lifted to $825,000.
Melbourne had a similar story, with the median price of houses sold this weekend up more than $100,000 on 2013, increasing from $456,500 to $563,000.
The increase isn’t surprising considering data from RP Data-Rismark published last month revealed capital city house prices rose by almost 10% in 2013, the strongest growth in four years.
In Sydney the growth rate reached 14.5%, in Perth prices jumped 9.9% and in Melbourne they were up 8.5%.
Thanks to the price rises many first home buyers have been locked out of the market, although Wilson predicts they will eventually trickle back into the market.
“Looking at the median house price from this time last year, the average was up by about 20%… There are now some big barriers for first home buyers,” Wilson says.
“In Sydney and Melbourne there is no grant for established properties anymore… there is a longer wait in the queue and with the wavering economy and jobs growth moderating over the past year, that impacts upon people in their early career and consequently first home buyers.”
In 2014 Brisbane has been tipped as a new property hot spot and experts say this weekend’s clearance rate of 54.55%, according to APM, doesn’t accurately reflect the market.
“It doesn’t have the auctions culture that Melbourne and Sydney do, with lots of properties sold through private sale and the auction season differing from Melbourne and Sydney,” Wilson says.
“The mood is positive for Brisbane and it’s generating an investor buzz. The budget market in Brisbane will be the last to pick up, particularly in the outer northern suburbs of Brisbane because there is still an oversupply there.”
However, Wilson says the middle-market is up and running.
“Brisbane has strong yields, potential for capital growth and a rising rental market.”