True to most predictions, the Sydney metro market continues its strong start to the year with seven consecutive weekends of 80%+ auction clearance rates. Last weekend’s 82% clearance rate was drawn from 392 recorded sales out of a scheduled 637 properties listed for auction. The Sydney market is tracking significantly higher than this time last year where clearance rates hovered around the 70% mark.

This result correlates with what IPS is seeing at ground level; continued strong interest from buyers across all price points and property types. Investors continue to remain highly driven by yields and are actively seeking out one and two bedroom strata apartments close to established infrastructure and transport corridoors. This investor focus is forcing many would-be-first home buyers out of the market due to affordability constraints, especially now that first home buyer grants have been wound back. AFG figures show first home buyer approvals for Feb were at an ultra-low 3.4% of all mortgages processed.

Competition in this lower price point ($400,000 – $650,000) is fuelling the ‘up-grader’ market with the $1million+ home-buyer market becoming equally as strong across the city.

Concentrated competition on investment grade assets brought about by continued depressed stock volumes are driving prices. The next 4 week pre-Easter selling season will be a good indicator of market depth.
 

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