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Sydney’s property auction market reached the highest clearance rate seen since 2015 in March, with a staggering 82.5% of properties selling under the hammer.
In fact monthly auction selling rates have held above 80% now for two consecutive months as Australia’s property market booms.
According to the latest Domain report, the monthly clearance rate in Sydney rose 2% from records set in February and remains 28.3% higher than in March last year.
Meanwhile homes listed to go under the hammer in March surged 61% from February and up 16.3% from the same time last year.
The data shows clearance rates on houses have outperformance those on units for the tenth month in a row.
Clearance rates for houses are at the highest monthly rate recorded since Domain records began in 1995.
Sydney regions with the highest clearance rates
Pre-auction sales reach record highs
And it’s not just the volume of properties to sell at auction which are surging to make new records, the number of pre-auction sales has also jumped.
The Domain report reveals that the number of sellers accepting an offer before the auction takes place is up to 37.3%, over 12% higher than the decade-long average.
This is happening because, the larger and more rampant the competition between buyers, the more likely a potential buyer is to put in an offer before auction day comes around. And this is something we see time and time again when we go through periods of property price inflation and the rate of property selling before auction rises.
Auction prices boom to make new records
For Sydney’s housing market, new records keep being made.
Aside from the volume of auctions and the volume of pre-auction sales, auction prices themselves are also reaching new heady heights.
Domain’s report reveals that Sydney’s house auction price for March rocketed 16.9% over the year to an impressive $1.755 million.
Meanwhile the median auction price for units rose 9% to $1.03 million, breaking the million-dollar mark for the first time in history. For houses, the median auction price has been rising steadily since September 2019 and for units since December 2020.
Up, up, up and away
Clearance rates have been steadily gaining momentum since May 2020 and the demand looks set to continue for a while longer.
Record high auction volumes, pre-auction sales and prices are a strong indicator of positive market sentiment.
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And with auction clearance rates firmly sitting so high, Domain expects the Sydney property market will continue to be competitive throughout late autumn and even into winter given buyer appetite continues to be so strong.
Because the combination of low mortgage rates, high household savings rates and a relaxed serviceability assessment has put buyers in the position where they’re able to take advantage of higher price expectations.
Low interest rates in particular are pushing buyers to make the move as home-buyers have quickly realised that their hard-earned money is much more worthwhile being used to invest in property rather than sit idly in a bank collecting near-zero returns.
Plus there are a range of incentives and grants currently available from both federal and state governments, such as a NSW first home owner grant or the halt on stamp duty requirements on homes valued under $800,000.
If historically low cash rates and restricted supply weren’t enough, there also seems to be a buyer ‘FOMO’ or fear of missing out which is making wannabe homeowners spend their money.
The lift in market sentiment has also encouraged sellers to the market, with auction listings continually rising, Domain says.