Rising housing prices in Australia persist due to five key factors, including housing supply shortages and a substantial increase in population– Sydney auction clearance rate reaches 66%

Week’s Key Focus

A recent report in The Daily Telegraph highlights the ongoing surge in housing prices across Australia this spring, driven by a combination of favorable factors. Despite a slight rise in interest rates, the real estate market remains remarkably robust.

Key Reasons for the Continued Rise in Housing Prices:

  1. Persistent Housing Shortages:
    Over the past six months, residential construction approvals have averaged 13,355 units per month, a 23% drop compared to the ten-year average. This shortage, especially in apartment-style residences, necessitates a review of zoning opportunities in some regions to increase housing supply.
  2. Strong Uptake of New Housing:
    House prices increased by 3% in June and 2.2% in September, indicating a high absorption rate of new housing supply. Demand still outpaces supply in most markets, despite increased choices for homebuyers compared to early 2023.
  3. Near-Peak Interest Rates:
    The Reserve Bank of Australia has held interest rates steady for four consecutive months. Although inflation has slightly decreased, it’s expected to take until 2025 to reach the targeted 2% to 3% inflation rate. Therefore, another interest rate hike is anticipated before the current cycle concludes, but market participants seem to have adapted to higher mortgage rates.
  4. Immigration-Driven Population Growth:
    Government projections show an expected net increase of 715,000 immigrants in Australia over the next two years. Many of these newcomers are likely to choose Sydney and Melbourne, driving property prices and rents higher in these cities.
  5. Urban Population Concentration:
    Two-thirds of Australians reside in one of the eight major capital cities, providing solid support for long-term price growth. While some have left cities for remote areas due to the pandemic and remote work, this trend remains relatively small. Urban areas continue to maintain high population density.
  6. Continued Interest in Remote Areas:
    The pandemic has heightened interest in remote living, leading to homebuyers working remotely and moving to coastal or rural areas. Improved transportation links between cities and remote regions are further encouraging this trend.

In summary, CoreLogic suggests that market corrections have concluded in most capital cities and remote areas. This presents a limited window of opportunity for homebuyers in these markets to benefit from price adjustments before prices rise further. Experts anticipate that national housing prices will reach new highs by the end of November.

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Auction Results This Week

  • Sydney: A total of 800 properties went under the hammer, with 531 auction results reported. Out of these, 348 were successfully sold, resulting in a solid clearance rate of 66%. The overall value of the auctions reached a substantial AUD 406,540,300, and the median property price stood at AUD 1,510,000.
  • Melbourne: In Melbourne, a whopping 965 properties were up for auction, and 691 auction results were reported. Of these, 468 were sold, achieving a strong clearance rate of 68%. The total auction value amounted to AUD 362,395,426, with the median property price at AUD 960,000.

Top 5 Auction Prices in Sydney Last Week: Houses

▼TOP 1. AUD  $6,550,000

Address:90A Chapman Av, Beecroft NSW 2119

Land Size: 3350 sqm

House | 6 Bed | 5 Bath | 3 Parking 

▼TOP 2. AUD  $6,110,000

Address:9 Janet St, Merewether NSW 2291

Land Size:  695 sqm

House | 4 Bed | 4 Bath | 2 Parking

▼TOP 3. AUD  $5,750,000

Address:177 Seaforth Cr, Seaforth NSW 2092

Land Size: 1813 sqm

House | 4 Bed | 3 Bath | 2 Parking

▼TOP 4. AUD  $5,080,000

Address:1-7 Bellevue St, Glebe NSW 2037

Land Size:  594 sqm

House | 3 Bed | 1 Bath | 5 Parking 

▼TOP 5. AUD  $4,910,000

Address:32 Empire Av, Concord NSW 2137

Land Size:  734 sqm

House | 5 Bed | 4 Bath | 7 Parking

Top 5 Auction Prices in Sydney Last Week: Units

▼TOP 1. AUD   $3,265,000

Address: 10A Lansdowne St, Eastwood NSW 2122

Semi |  5  Bed |  5 Bath | 2 parking

▼TOP 2. AUD   $2,800,000

Address: 3/46 Drummoyne Av, Drummoyne NSW 2047

Unit |  2 Bed |  2 Bath | 2 Parking

▼TOP 3. AUD   $2,700,000

Address: 303/30 Glen St, Milsons Point NSW 2061

Unit  | 3  Bed | 2  Bath  | 2  Parking

▼TOP 4. AUD   $2,625,000

Address: 13 Woods Av, Woollahra NSW 2025

Teraace| 3 Bed | 2 Bath  | – Parking

▼TOP 5. AUD   $2,510,000

Address:1/5 Neptune St, Coogee NSW 2034

Unit | 2 Bed | 1 Bath   | 1 Parking

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