SYDNEY’S real estate market is on track for its biggest boom since the global financial crisis.
Super Saturday auctions across Sydney today will deliver a huge win for property owners with economists forecasting a flurry of buying and selling over the next six-months.
Across the city, there will be 829 auctions — up from 491 last year — and clearance rates expected to reach as high as 90 per cent.
Forget the boom or bubble debate that has raged courtesy of a bumper winter period — the floodgates are about to open.
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Real estate analysts believe the heat will not just stay in the property market beyond Christmas, it will continue to build, from strength to strength.
Macroplan chief economist Jason Anderson said patient, prospective buyers were now, en masse, finally convinced that the dark clouds that had shadowed Sydney’s property market since 2010 had well and truly disapated, creating a monstrous bottleneck in their pursuit to snap up homes.
And the sellers can’t get enough of it.
“If you have a look at the scale of how weak the turnover has been for the last two years, it proves that this heat will be sustained, I think we will get more and more momentum coming through in overal sales. And in terms of auctions, I don’t see any reason why the numbers won’t continue on for another six months,’’ Mr Anderson said.
``We are playing plenty of catch up in this market because a lot of people have been sitting on their hands and watching prices being reported as down. So this is real and we are seeing volumes that we haven’t seen for the best part of a decade.”
Building up Super Saturday, auction clearance rates have exceeded 80 per cent for three weeks running; the first time this has happened since RP Data began tracking results in 2008.
Last week’s figure of 88.4 per cent was a new record high and there are more auctions planned today than on any corresponding weekend in previous years.
“It will definitely be a big week,” said Cameron Kusher, RP Data senior research analyst. “The market is very strong and we expect that to continue throughout spring.”
Historically low interest rates have seen buyers flood the market, competing over a shortage of available stock. Listings are increasing, but not nearly enough to meet demand.
Buyers will also be buoyed by the belief that the Reserve Bank will clip official interest rates another 0.25 per cent before Melbourne Cup Day, as has been predicted by Westpac chief economist Bill Evans.
“The volume of people at open homes is phenomenal,” said Matt Lahood, director of sales at McGrath Estate Agents. “Up to 15 people are registering to bid at auctions, as opposed to the normal two or three, showing there’s not enough stock.”
Auctioneer Matthew Shalhoub of Under The Hammer will call 13 auctions today.
“This spring is definitely the most active for buyers,” Mr Shalhoub said. “People are bidding more aggressively, which comes from missing out on properties and wanting to make sure they get the next one.”
Listings are only marginally up on previous years, but clearance rates are streaks ahead.
“This time last year there were 491 auctions for a 55.2 per cent clearance rate,” said Mr Kusher. “In 2011 there was a 50.5 per cent clearance and 2010 saw a 58.8 per cent clearance.
“The most similar year to now was 2009, when prices were on the rise thanks to the first homebuyer boost, low interest rates and the stimulus that followed the GFC. In that year there was a clearance rate of 74.2 per cent.”
This year, the two hottest council areas are Sutherland and the City of Sydney, each with 37 auctions. Bankstown, Randwick, Rockdale and Fairfield are close behind. It was a similar story in 2012, with Randwick leading the charge (46 auctions), followed by the City of Sydney, Sutherland and Woollahra.
“Recently, we’ve had 90 per cent plus clearances in some of these areas,” said Chris Mourd, LJ Hooker head of network. “Buyers are moving forward and acquiring properties more confidently than in recent years.”
Alexandria has the most auctions of any suburb in the City of Sydney LGA, with six.
Austin and Amie Huntsdale are hoping for a successful result on their two-bedroom house at 189 Belmont Lane, which will go under the hammer at noon, through Brigitte Blackman of LJ Hooker.
The property is likely to sell for more than $850,000, after the couple paid $655,000 back in 2008 and performed several renovations.
“We’ve had a couple of offers already,” Mr Huntsdale said. “There’s not a lot out there in this area at the moment and it’s a great little house, so I think we should do okay.”
The transformation of inner south suburbs means the Huntsdales may have timed the sale perfectly.
“It’s very close to the city and also the airport but without being below the flight path,” Mr Huntsdale said. “There have been good developments, cafes and nice restaurants coming in and also a lot of parks, so you can see why it is becoming so popular.”