Housing recovery ‘we had to have’

Couples are camping overnight for the chance to purchase land and agents are finding queues at open homes.

Fred Geneid inspects a house at Maroubra in Sydney’s southeast with sons Max, 14, and Robert, 10. Picture: Britta Campion

Couples are camping overnight for the chance to buy land and agents are finding queues at open homes as the heated market ­approaches frenzy levels.

Ten groups camped outside the sales office of The Glades, a master-planned community in the outer-northwestern Sydney suburb­ of Box Hill, last Friday night in the hopes of securing a lot of land. All 10 lots were sold in a matter of hours the next day, with developer Celestino forced to turn away other hopefuls.

This level of buyer engagement has not been seen since the lead-up to the last market peak in 2017. Since the end of the downturn in June, which coincided with Reserve Bank interest rate cuts and the banking regulator’s loosening of credit restrictions, demand has undergone a resurgence.

Auction clearance rates in the past three months have hovered around 70 per cent in the nation’s two largest capitals. Last week, Sydney agents sold 75.4 per cent of homes that went to auction, nudged out by a 76 per cent result in Melbourne. Commentators expect­ the rate to hold steady, ­despite the growing number of properties slated to go under the hammer in coming weeks.

The chief economist at My Housing Market, Andrew Wilson­, said the high levels of demand­ were a symptom of a “recovery­ we had to have”.

He said it shouldn’t be a surprise, with a plethora of incentives for first-home buyers and median prices in all capital cities remaining below their peaks.

“It is still a discount market, just. It means people can now buy with lower rates and higher ­incomes,” Dr Wilson said. Price rises of more than 10 per cent in Sydney and Melbourne since the middle of last year equated to an estimated net 3 per cent rise over the past three years, in line with broader economic growth through that time.

But weaker-than-expected unemployment figures released earlier this week could spur the Reserve Bank to again cut interest rates from its record low of 0.5 per cent.

Dr Wilson said this would create another flurry of housing ­demand.

“The RBA pinned their hopes on the mast of employment. These figures are not a good ­result for them,” he said.

“If we do get a rate cut sooner rather than later, it is certainly going to add fuel to the housing market and push up demand.”

A penthouse in Sydney’s beachfront suburb of Maroubra has drawn huge crowds since it was listed four weeks ago. Ray White Maroubra and South Coogee­ agent Nader Hotait has shown 80 groups through the property, sending out 14 contracts to be reviewed ahead of the auction on Saturday.

Hopeful buyers Fred and Nadine Geneid are looking to move from a house they co-own on the same street.

The couple have been going to many open houses and auctions in recent­ weeks.

“Auctions can be a bit apprehensive, but it is what it is. It’s hard to gauge,” Mr Geneid said.

“Some auctions you go to you just can’t believe what the price is and some you think ‘I wish I was more prepared for that one’. Who knows what will happen?

“It’s a Pandora’s box, you open it up and anything can fly out.”