Rate cut can't be ruled out as hot auction weekend looms

Sydney’s frustrated home buyers will gain some relief this weekend with the local auction market set to host its highest listing numbers since the pre-Easter super Saturday more than six months ago.

Nearly 800 auctions are scheduled on Saturday, significantly higher than the 628 last weekend but still lower than the 1088 listed over the same weekend last year.

Hungry buyers have been confronted with a significant shortfall in property choice throughout winter and into spring compared to the same period last year. 

The upper north shore will host the highest number of auctions of the Sydney regions this weekend with 124 followed by the south 109, the inner west 108, the city and east 85, the lower north 68, the south-west 60, the west 55, the northern beaches 54, the north-west and Canterbury Bankstown each with 45, the central coast 16 and the Blue Mountains with just one auction scheduled on Saturday.

Carlingford is again the most popular suburb for auctions in Sydney on Saturday with 12 listed followed by Mosman and Pymble each with 10, Castle Hill and Hurstville each with nine, Randwick and Chatswood with eight each and Drummoyne, Turramurra and Concord with seven houses each. 

The Sydney home auction market surged last weekend with clearance rates now approaching record levels from a spring market that is proving irresistible to buyers. 

Sydney recorded a remarkable clearance rate of 84.4 per cent last Saturday, well ahead of the previous weekend’s 80 per cent and light years from the 64.4 per cent recorded over the same weekend last year.

The Sydney market is now tracking at its highest since the peak of the record boom-time results reported over autumn last year. 

Most of Sydney’s suburban regions reported strong results last weekend in a relatively even performance although inner-suburban higher-priced suburbs continue to lead with exceptionally high clearance rates.

The lower north was the top performer yet again with 92.5 per cent followed by the city and east with 91.8 per cent, the inner west 88.6 per cent and the highest sales at 70, the upper north shore 85 per cent, the northern beaches 84.2 per cent, the south 81.3 per cent, the south-west 80 per cent – a significant improvement on last weekend’s result, Canterbury Bankstown 78.8 per cent, the west 78.1 per cent, the north-west 77.8 per cent and the central coast 68.8 per cent.

High and rising auction clearance rates are predictably translating into strong prices growth in the Sydney market. 

Latest Domain data reports that the Sydney median house price increased 2.9 per cent over the September quarter to a record-high $1,068,303. 

This was the fastest rate of growth recorded since the September quarter last year with Sydney house prices now up 5.3 per cent over this year so far.

Sydney unit prices also increased over the quarter, up 1.8 per cent to $685,865 for an increase of 2.9 per cent over the year so far.

Lower interest rates and investors have been a key catalyst for rising house prices in the Sydney housing market over winter and into spring.  

Next week the Reserve Bank will meet for its traditional Melbourne Cup day interest rate decision. Although rates are more likely to remain on hold for the third consecutive month since the August cut, a reduction certainly cannot be ruled out. 

The economy continues to send mixed messages – lower jobless rate but sharply falling full-time employment levels, a high dollar and underlying inflation at record low levels.

But then, there are booming house prices in the Sydney and Melbourne housing markets.

Dr Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson

2UE Lifestyle Radio Fridays 11am and Mondays 5pm