Sydney’s clearance rates are down to 73 per cent from an April high of 90 per cent,
Does this mean that the sky is falling in that prices will soon drop? Almost certainly not in my opinion. 73 per cent is still considered to be a sellers’ market (albeit not as strong as previously).
Given the number of properties on the market it’s hard to see how the auction market could remain in such rude health. The latest weekly listings data for Sydney shows that over the past 4 weeks there were 8,525 new listings and 20,121 total listings. New listings are now at their highest level since the end of November 2014 and total listings are at their highest level since the week ended December 2014.
The latest sales data to June 2015 shows that over the second quarter of the year there were 23,432 sales. And, with lots of newly built properties coming onto the market, a clearance of 73 per cent is still pretty strong.
We all know the story; Sydney home values have increased by 17.6 per cent over the 12 months to August 2015. Sydney home values have been trending higher since they reached a low point in May 2012 and since that time Sydney home values have increased by a total of 49.5 per cent. To put that growth in perspective, a home worth $500,000 in May 2012 would now be worth $747,704.
Given this and the volume of properties on the market only a fool would predict things would go on forever and ever. But at the end of July 2015 the typical Sydney home was selling after just 25 days. CoreLogic RP Data has been tracking the time on market since the beginning of 2005 and this is the quickest rate of sale recorded over this period.
While the rate of growth in property prices will likely start to slow, demand is clearly still there will be rises – albeit at a more moderate pace.