Tight lending, weak economy and COVID-19 will slow the pace of Sydney house sales
Sydney house prices will continue to rise on the back of pent-up demand, rate cuts and the fear of missing out but COVID-19, poor affordability, the weak economy and still tight lending standards will likely slow the pace of gains.
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Sydney house prices will continue to rise on the back of pent-up demand, rate cuts and the fear of missing out.
However, coronavirus, poor affordability, the weak economy and still tight lending standards are expected to see the pace of gains slow, according to AMP Capital chief economist Shane Oliver.
“Coronavirus is posing an increasing risk if people decide to put buying on hold and particularly if the economy gets knocked into recession by the virus, resulting in higher unemployment,” Mr Oliver warned.
The latest CoreLogic data showed Sydney home prices jumped 1.7 per cent in February to be 10.9 per cent higher over the past 12 months.
Mr Oliver noted the rising impact of the coronavirus posed an “obvious threat” to continuing similar price gains.
He also anticipates “people might put home buying on the backburner for a while”.
The comments came as the International Monetary Fund warned the Sydney housing market was at risk of “renewed overheating”.
In its annual review of the economy, the IMF calculated Australia’s house prices were 7 per cent above a debt-service-to-income ratio of 25 per cent, which is considered a reasonable level of debt. It sits at 40 per cent in Sydney.
The first weekend of autumn auctions followed most home loan lenders cutting rates after the official Reserve Bank of Australia cash rate cut.
There were 615 properties go under the hammer. With 422 results captured and 353 sold there was an 83 per cent preliminary clearance rate.
Some 170 properties sold prior to auction, Kevin Brogan of CoreLogic noted.
According to CoreLogic there was a small decrease in listing activity from the prior weekend, but they will remain constant with 614 scheduled for this Saturday.
Sydney’s most affordable sale was $340,000 pre-auction for a dated 1960s Rockdale apartment through PRD agent Nick Reskakis.
The 40sqm one-bedroom Watkin St unit that last traded in 1997 for $118,000 sold to a first homebuyer.
Out of Sydney there was $2.1 million sale at Lennox Head. It was a two-bedroom house on a 751sqm Pacific Pde block opposite the beach, tightly held for about six decades.
“As Byron Bay has become so popular, buyers are looking to surrounding areas like Lennox Head,” McGrath selling agent Shawn Bishop said.
There were eight registered bidders who were keen for the opportunity.
AN APARTMENT TO CROW ABOUT
Geeks2U manager Michael Hancock and his personal trainer partner Holly Murrells are selling in Crows Nest this coming weekend — so that they can buy a larger home with their bulldog puppy, Winston.
The three-bedroom, two-bathroom Willoughby Rd apartment, listed through Belle Property estate agents Mark Jackson and Christian Percuoco, is larger than most in the suburb.
Positioned on the top floor of the block, the apartment features three separate outdoor spaces.
It also has double secure underground parking.
“We love its year-round natural light,” Mr Hancock said.
“We plan to move to a terrace or freestanding home with more of a yard for us to enjoy and for Winston to play in.”
He said low interest rates had not contributed to their decision to upgrade homes.
“I’m purely selling for lifestyle reasons,” he said, adding: “I wouldn’t be selling if the Crows Nest market hadn’t rebounded.”
The price guide for the auction this Saturday is $1.4 million.
“In 15 years, I have never seen stock so low,” listing agent Mark Jackson said.
“This has created a fantastic opportunity for owners of quality homes like Michael’s apartment.
“Buyers are competing very strongly for properties that tick all the boxes.”
The two-bedroom Crows Nest median unit price is $927,500, with such properties typically renting for $680 per week.
Based on five years of sales, Crows Nest has seen a compound growth rate of 3.5 per cent for units, according to realestate.com.au.
WOOLLAHRA’S WOW FACTOR WITH $6.1M WINNING AUCTION BID
Sydney’s dearest weekend auction sale was $6.1 million in Woollahra. There were two bids for the 1888 home after it was announced on the market at $6 million by Ben Collier and Fraser Turvey at The Agency.
There had just been a splash of paint added to the house since it last sold at $3,425,000 in 2015.
The three-storey home that sits on a 367sqm Wallis St block also came with approvals for an extension.
The latest Woollahra listing comes from the Palm Beach-based philanthropic fashion legend Peter Weiss and his wife Doris.
Weiss, who helped define the Australian fashion scene in the 1980s and 1990s, bought the cottage for $3.75 million in 2015 from the late composer Peter Sculthorpe.
The charming two-bedroom Holdsworth St cottage has been listed by 1st City agent Simon Doak for an April 4 auction with $6 million hopes.
There were 14 buyer groups through during Saturday’s first open for inspection.
The cottage sits on a 302sqm block diagonally opposite the Lord Dudley Hotel.
A $6.04 million penthouse sale in Rose Bay was Sydney’s second-highest weekend sale. Sotheby’s International agent Michael Pallier had a $5.5 million guide for the 491sqm Kent Rd apartment with wraparound terraces, one of five apartments in the 2007-built Ashton development built.
The Ercole Palazetti-designed penthouse was first sold in 2014 to the Falkiner pastoralist family for $4.45 million.