Australian investors are taking advantage of low interest rates for to grow their real estate holdings in Sydney during last weekend’s auctions, which ended with an 80% clearance rate.
Experts say that this high demand, along with the shortage of listings, could lead to a continuous rise in property prices.
Domain Group reports that the median asking prices for properties in Sydney have increased by 3.1%, compared to those recorded during the August quarter last year.
Auctioneers have observed that most investors were bidding on houses and apartments with a desirable ocean view.
“The price of apartments across the board, in Sydney metro, has been increasing at a rapid rate and anything with a view really builds the emotion in the buyers,” said auctioneer Damien Cooley.
However, some buyers were less fussy and still bid higher than the reserve price for properties with less than ideal ocean views, wherein the water can be seen just from the corner of a tiny balcony or diagonally across the window. Some also opted to bid on properties with anything special about them, even without the view.
AMP chief economist Shane Oliver expressed that APRA interventions might be possible.
“The case for more APRA intervention in the face of still too hot Sydney and Melbourne property markets remains,” said Oliver.
“I don’t think we’ll go back to the double-digit gains we saw last year, but that’s certainly the risk in this environment.”
Andrew Wilson, Domain Group chief economist, said that the western suburbs sold the most properties during this weekend’s auctions, with a 90.5% clearance rate. The lower north came next with 88.4%, followed by the south with 85.7%.
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