Strong real estate sales results from the weekend in Melbourne and Sydney have buoyed expectations for the rest of 2013, which has already seen “unprecedented” figures.
But market analysts point to icebergs on the horizon, with unknowns such as interest rates, unemployment rates and wage growth in the new year expected to level out growth.
“There are some concerns over the future direction of the local economy,” Andrew Wilson from Australian Property Monitors told SmartCompany. “Over the medium term house prices will be constrained by wages growth.”
According to APM, the clearance rate in Melbourne was 76.9%. There were 1362 properties listed and 922 of them auctioned, of which 714 sold. Total sales reached $438.8 million and median prices for auctioned houses was $809,250 and units $506,750.
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Activity focused on the bayside suburbs of Brighton, St Kilda, Port Melbourne and at Glenroy, and leafy, affluent Hawthorn, says Real Estate Institute of Victoria spokesman Robert Larocca.
Larocca says the above-trend market was a “really, incredible result” but next year held some signs for caution.
“What we’ve seen seems quite sustainable for the Melbourne market,” he says. “Looking into next year we have to have an eye for the wider economy.”
Wilson says the weekend in Melbourne “broke all records”, and buyers had the choice available to find an appropriate property.
In Sydney the clearance rate was 83.2%, with 689 properties listed and 459 auctioned, of which 400 sold. Total sales reached $352.3 million and median prices for auctioned houses was $1 million and units $650,000.
In Sydney, clearance rates had been above 80% for 14 of the past 16 weeks, pointing to investors re-joining the market after selling to first home buyers last year, Wilson says.
He said activity focused on the inner west, southern Sydney and the upper north shore.
Real Estate Institute of New South Wales chief executive Tim McKibbin told SmartCompany “confidence” had grown over the past 12 months in the state due to low interest rates.
“The momentum we’ve seen here is sustainable and will flow into next year,” he says.
He says the major problem was supply of houses for sale.
Other capitals fielded much lower totals, Brisbane had a clearance rate of 56.8% and Adelaide posted 48.7%.