The Sydney Suburban Housing Market Reaches Historic Highs with Significant Price Rebounds – Sydney Auction Clearance Rate Reaches 67%

Week’s Key Focus

Latest data reveals that 18 suburbs in Sydney have rapidly rebounded from a previous slump, with property prices surpassing peak levels from the last market boom. This trend is expected to continue as buyer demand outpaces housing supply. For instance, in the northwestern suburb of Glenhaven, the median home price is 4.7% higher than the previous peak, while Breakfast Point has seen prices rise by 4.1% above peak levels, and Strathfield and North St Marys have experienced a 3.3% increase. These figures include both standalone houses and units.

Last month, suburbs in the western and southwestern regions such as Dean Park, Pemulwuy, Punchbowl, and Claymore achieved historic price highs, with increases of at least 2% compared to previous records.

Other areas like Rushcutters Bay, Pymble, Belfield, Burwood, and Mortlake have also exceeded their previous price peaks.

Despite the substantial price rebounds in these suburbs, their declines during the downturn were relatively modest, making them more poised for rapid recovery now. Residential property prices across the entire Sydney region are still 6.2% below peak levels, but they have rebounded by 8.8% from their January lows.

The primary driving factor behind this resurgence is the supply-demand imbalance, particularly in family-friendly, affordable areas. However, while property prices are rising rapidly, and auction clearance rates are high, affordability concerns may put greater pressure on household budgets, limiting future value growth.

Stephen Halmarick, Chief Economist at the Commonwealth Bank of Australia, predicts that Australian real estate prices will reach new highs next year, with a 7% increase this year and an additional 5% rise next year. He believes this is a simple issue of supply and demand, as not enough new homes are being built, and Australia is experiencing a surge in net migration post the COVID-19 pandemic. Despite the very high mortgage payment-to-income ratio, which may rise further, the balance of supply and demand is expected to continue driving prices upward. By this time next year, prices are expected to return to historical highs, with future prospects depending on the labor market and supply levels.

Sekisui House

Auction Results This Week

Sydney: 811 properties were auctioned, with 534 auction results reported. Out of these, 357 properties were sold, resulting in an auction clearance rate of 67%. The total auction value amounted to 377,777,801 Australian dollars, with a median property price of 1,610,000 Australian dollars.
Melbourne: There were 858 properties auctioned, with 627 auction results reported. Among these, 396 properties were sold, resulting in an auction clearance rate of 63%. The total auction value reached 279,099,850 Australian dollars, with a median property price of 989,000 Australian dollars.