Robust Sydney auction market translates into house price surge

Continuing robust home auction results in the Sydney market are being fuelled by strong competition among buyers for low numbers of available mid-winter properties for sale. 

About 360 auctions are set to go under the hammer in Sydney on Saturday, which will be marginally lower than the 371 auctioned last weekend but well below the 715 listed over the same weekend last year. Last year’s record high mid-winter auction activity was fuelled by extraordinary strong market conditions.

The inner west and the upper north shore will host the highest number of auctions in Sydney this weekend each with 54. Next highest is the south with 44 followed by the city and east 37, the lower north 32, the northern beaches 31, the west 28, Canterbury Bankstown and the south-west 22 each, the north-west 16 and the central coast nine.

The most popular suburbs for auctions in Sydney this weekend are Ryde, Surry Hills and St Ives each with six. A number of suburbs will host five auctions this weekend including Ashfield, Castle Hill, Leichardt and Annandale.

The Sydney home auction market produced another strong result last weekend with lower winter listings fuelling feverish competition among enthusiastic buyers in most areas.

Sydney recorded a clearance rate of 75.5 per cent, which was similar to the 75.4 per cent recorded the previous weekend but lower than the 83.1 per cent reported over the same weekend last year.

Strong auction market conditions through autumn and into winter have predictably resulted in a sharp increase in Sydney house prices.  

Latest Domain data reports the Sydney median house price bounced back sharply over the June quarter following consecutive quarterly falls to record an increase of 2.4 per cent. The Sydney median house price has again exceeded $1 million at $1,021,968 but remains below the all-time high of $1,045,991 reported over the September quarter 2015. 

Sydney house prices have increased by just 1.2 per cent over the past year – the lowest annual increase in four years.

Sydney unit prices increased slightly by 0.6 per cent over the quarter to $669,830 for an annual increase of just 0.4 per cent – the lowest annual increase since the December quarter 2011.

Lower interest rates and increased activity by investors have supported Sydney house price growth over the June quarter. With the prospect of further falls in interest rates, a strong local economy and surging migration, the likelihood is that Sydney prices will continue to rise through the remainder of the year.

Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson

My Property 2UE Fridays 2pm to 3pm, Saturdays 12.30pm to 1pm