Spring has always been a popular time to list a home for sale in Sydney, and data from CoreLogic shows properties advertised for sale is at the highest level in five years.
Not since 2012, have we seen the volume of Sydney properties for sale at this level. Sydney is bucking the national trend, which is at its lowest level in over five years.
The national average is lower due to capital cities Melbourne and Hobart experiencing the lowest levels of for sale stock in the last 5 years, dragging the national figure down. In fact, Hobart stock for sale is -54.7% lower than it was two years ago.
Highest stock levels in Sydney
Currently, Sydney has 25,625 properties advertised, almost 20% more than this time last year. Whilst demand may remain, supply in the Sydney market is now stronger, leading to price growth declines.
Auction clearance rates across Sydney, have been consistently below 70% for the past 14 weeks, and last week experienced the lowest seen since early 2016 (58.3%). Compared to a year ago, 1,087 Sydney homes were taken to auction and the clearance rate was 78.8%.
Sydney prices declining, but property still moving quickly
After dwelling values surged almost 70% higher over the past five years, Sydney dwelling values have fallen by
-0.6% over the three months to October 2017, however, they are 7.7% higher over the past year.
In November, CoreLogic reported that Sydney vendors were discounting the listed prices by around -4.9%, however it’s likely we’ll see this increase in December and January figures. Sydney’s average days on the market sits at 36 days, so stock is still moving relatively quickly.
Who is buying at the moment
There has been a fairly significant upswing in lending to first home buyers over the past few months, however investors and owner occupiers (not first home) are the buyers with the highest housing home loan commitments.
Upgraders and investors remain the key drivers of housing demand however, investor demand is slowing and first home buyer demand is lifting, particularly in NSW and Vic on the back of stamp duty concessions available.
Rents in Sydney have increased by 3.7% over the last 12 months, however the gross rental yield remains low at 3.1% due to the higher property prices.
Finance for buying in Sydney
Interesting, November data shows regulatory changes and higher mortgage rates, have impacted on investment demand and owner occupier demand is also slowing. The percentage of interest only mortgages (30.5%) is now just above the APRA set target of 30%.
Mortgage rates remain around historic lows for owner occupiers but have edged higher for investors. On average, there is a 0.6% to 1% interest rate difference between owner occupiers and investor rates, and whist investors have had a challenging year, policy changes and interest rates are becoming more favourable.