The Sydney property market continues to go from strength to strength as spring season kicks into full gear. Last week, Sydney recorded a preliminary auction clearance rate of 85.6% according to Core Logic. This was up more than 20% from the corresponding week last year.
Not to be too far outdone by Sydney, Melbourne’s preliminary auction clearance rate was 81.8%.
But it’s not just Sydney seeing some big results. The auction clearance rate across the capitals was reported by Core Logic as the highest this year at just over 80%. Every capital city except Perth recorded an auction clearance rate higher than the same week last year. Adelaide (77.4%) and Canberra (74.4%) were the other strong performers.
As expected, the week before the pre-Melbourne Cup weekend was buzzing. Across the capitals, 2,641 homes went to auction last week, up around 200 from the prior week.
Despite this increase, the number of homes for sale in Sydney and Melbourne are still down from the same time a year ago. Sydney hosted 866 auctions last week, which was down from 1,024 in the same week last year. Melbourne offered more choice for buyers with 1,378 auctions, though this was well down from 1,690 in the same week last year.
Relatively slim pickings in the Sydney property market may be driving up the auction clearance rate, but last week there was a small drop in the median auction price to $1.21m, according to Domain. A 3br, 252sqm townhouse in Ermington close to the Parramatta River sold under the hammer for this price, while a 2br Rose Bay brick unit with lock-up double garage fetched $1.201m.
At the top end of town, a 6br home in Tennyson Point went under the hammer for $8.3m, making it the most expensive property sold at auction in Sydney last week. Sitting on 1,508sqm, the home is situated right on Glades Bay and features an eight-car garage, gym and retractable pontoon.
The Sydney property market remains difficult for first home buyers to enter, with the ABS reporting that lending to first home buyers in NSW has decreased 7.5% over the first eight months of 2016. It’s likely that the higher starting point is what’s making it difficult for first home buyers.
The most affordable property sold at auction last week was a renovated 2br unit with off-street parking in Warwick Farm that went for $375,000.
In contrast to Sydney, the starting price in Melbourne is significantly lower. The most affordable home reported sold at auction last week was a 1br unit in West Footscray that fetched $200,000. It was advertised as ideal for renovation and/or investment given the unit’s proximity to shops and public transport.
The median auction price in Melbourne is also noticeably lower than Sydney’s. Last week Domain recorded it as $872,000 – enough to buy a renovated 3br home in Moorabbin as well as a 4br, 625sqm brick house in Aspendale Gardens.
At the other end of the market, a 4br house in Hawthorn went under the hammer for $5.02m to claim the title of Melbourne's most expensive disclosed auction sale for the week. The circa 1890 Victorian home sits on 1,147sqm and was listed as having potential to improve and extend.
The number of properties for sale in Melbourne and across all capital property markets is expected to drop in the lead-up to the Melbourne Cup, giving competitive buyers a slight breather.