One for the Record Books! Stunning 89% Preliminary Auction Clearance Rate Feb 6
- HIGHEST PRELIMINARY CLEARANCE RATE IN 24 YEARS
- HUGE CROWDS AT AUCTIONS COMPETING FOR LIMITED SUPPLY OF PREMIUM HOMES
- RBA REASSURES BORROWERS – CASH RATE LOCKED AT 0.1% UNTIL 2024 “AT THE EARLIEST”
- ADDITIONAL $100B ADDED TO TERM FUNDING FACILITY FOR EASIER HOME LOANS
(CoreLogic and REIA figures. RBA Charts)
Last weekend’s 89% preliminary auction clearance rate left even the most seasoned real estate veterans searching for superlatives.
Many properties sold before auction. Those that made it to auction day were greeted by huge crowds, long lists of registered bidders and winning bids well above reserve. Competition was fiercest for premium homes, with preliminary clearance rates of 100% in the Inner City and Northern Beaches reflecting the -7.3% drop in new listings compared to this time last year.
The coming months will see a seasonal increase in total properties listed for sale but easier credit conditions for borrowers should provide strong support to the market for the foreseeable future.
For January, Corelogic’s Sydney Median Dwelling Value increased 0.4% to $879,299. This equates to an annual increase of 2.0% and a healthy total return of 4.6%.
Sydney median unit values continue to lead the nation but are underperforming relative to houses. Median time on the market stands at 50 days for houses but 70 days for units, with rental yields also lagging. This reflects the lack of overseas arrivals and net population growth that typically underpin demand in this sector. Expect a wave of pent-up demand to hit the market once current restrictions are eased later this year.
THE RBA REASSURES THE FINANCIAL MARKETS – RECORD LOW RATES UNTIL 2024 “AT THE EARLIEST.”
After a quiet January, RBA Governor Philip Lowe was on the front foot delivering a powerful message to global financial markets – interest rates are not going up and asset prices are not going down.
In an address to the National Press Club and in his monthly RBA monetary policy statement, Mr Lowe stated:
”Financial conditions remain highly accommodative, with lending rates for most borrowers at record lows and asset prices, including housing prices, mostly increasing. Housing credit growth to owner-occupiers has picked up recently.
The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. The Board does not expect these conditions to be met until 2024 at the earliest.”
This is the financial backstop many lenders and borrowers have been waiting for. Policy certainty allows market participants to prudently plan for the future and make informed decisions when lending to qualified buyers. The importance of the RBA Term Lending Facility cannot be overstated. The big four banks now have direct access to $100 billion of additional funds to lend out as home loans. Bank profitability remains high despite the low rates because the quantity of total outstanding loans is increasing to match demand. The current spike in Housing Loan Commitments reflects this easier availability of credit.
The bottom line is that with housing interest rates locked until at least 2024 at record low rates and employment returning to pre-crisis levels, demand for Sydney real estate should remain robust for years to come.
THE V-MARK ADVANTAGE – PRESENT YOUR PROPERTY PERFECTLY ACROSS ALL MEDIA PLATFORMS
At V-Mark Design we are passionate about real estate and everything relating to it. We tailor our work to your unique selling style and sales strategy. Our ultra-high-resolution photography is scaled to suit your marketing needs.
A perfect example is the move to high-end smart phones as the first point of contact for your listing. Resolutions on these devices often exceeds the old Full HD standard from just a few years ago. Clients will zoom in on photos that interest them. Poor photography and low resolution can dramatically lower client engagement with your listing. There are no shortcuts – the best listings demand the best photography.
We wish you continued success in what may well be a banner year for Sydney real estate.