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Sydneysiders have strong odds of selling their home at auction this spring thanks to a keen buyer pool and growing fear of missing out as property prices climb.

Sydney recorded an auction clearance rate of 72.1 per cent last month, up 4.5 percentage points from July, but below the 81.5 per cent recorded in June when there were fewer homes for sale.

An auction clearance rate of 70 per cent usually correlates with annual price growth of about 10 per cent, while a rate of 60 per cent reflects a balanced market.

Domain’s chief of research and economics Dr Nicola Powell said Sydney’s healthy clearance rate pointed to a broader recovery in the city’s property market.

“While the recovery was initially led by those more premium areas, this is more of a broad-based strength of the auction market,” Powell said.

“The strength is still led by those auction-centric markets like the eastern suburbs and northern beaches. The weaker areas are those outer areas.”

Some outer areas bucked that trend, with the Blacktown region recording the highest clearance rate at 77.7 per cent.

It was followed by the Eastern Suburbs, Sutherland, Ryde, City and Inner South and North Sydney and Hornsby regions, which recorded clearance rates between 74 and 76 per cent.

Owners were least likely to sell under the hammer in the outer west and Blue Mountains, which had the lowest clearance rate at 61.8 per cent.

The strength was driven by the lack of homes for sale this year and depth of buyer demand, Powell said.

“If a buyer has consistently missed out at an auction it just puts more fire in their belly to make those aggressive bids,” she said. “The tent peg that has been underpinning the market has been the lack of listings.”

Still, many properties never made it to the auction floor, with almost 30 per cent sold before auction day, which Powell said likely reflected buyers making strong pre-auction offers. About 15 per cent of auctions were withdrawn.

Powell said an expected increase in homes for sale would give buyers more choice, and could weigh down the clearance rate and slow price growth. However, she warned buyers had likely missed the opportunity of buying on the low side, noting there was unlikely to be a surge in distressed listings and mortgage arrears remained low.

Westpac senior economist Matthew Hassan said the market would be tested as more sellers returned, eyeing rising prices and stabilising interest rates.

“Clearance rates are still pretty buoyant but as we push more into the spring selling season we will get a better sense of the depth of buyer demand [as supply rises] and I suspect we will start to see some of the [price] momentum slow.”

The rebound in Sydney prices, up 8.8 per cent on CoreLogic figures since the January trough, was not sustainable, Hassan said, with prices closing in on peak levels and buyers facing lower borrowing power than before.

Still, Hassan, who believes rates have peaked, expects Sydney prices to lift 10 per cent by the year’s end, and a further 6 per cent next year. When rates do eventually fall, which he expects in August, he thinks it’s unlikely that demand and prices will soar due to affordability constraints.

Leichhardt locals Tim Wolfenden and Caroline Knight are among those heading to auction this month, listing their four-bedroom house to relocate to Pennant Hills.

“We’re really buoyed and confident currently. The right properties are moving,” Wolfenden said. “There will undoubtedly be more properties coming to the marketplace.”

The couple bought in August but only after realising the property market’s strength since the start of the year and missing out on a home at auction.

“It is counterintuitive that prices rose this year. There was a shortage of stock in the market, there was not a lot of choice. So, it was more competitive for the properties that were there,” Knight said.

Their selling agent Matt Carvalho of Ray White Erskineville expected the market recovery to continue to the end of the year despite the increase in listings.

“Appraisal numbers through June, July, August [were] very high … because people were noticing a shortage of supply and good results,” he said, but noted they had dropped since.

Those unable to sell at auction, typically had unrealistic price expectations, or a property with less desirable features. However, A-grade properties like the four-bedroom Leichhardt house, guided at $2.1 million, were in short supply and sell well in any market.