August 29, 2013 by Craig Pontey
Elections usually spell bad news for the real estate market as buyers and sellers adopt a wait and see attitude. But apparently not this election, where it appears that at least the market has already voted! According to APM last week’s local Sydney auction clearance rate was a more than impressive 79% while in Victoria it was even higher at 82%. I have already seen our forward auction listings show a big jump over last year. I have also seen a big increase across inspection numbers for both private home sales and for apartment projects selling off the plan.
Last week the following comments from Dr Andrew Wilson published in the SMH/Domain appear to reinforce the sentiment we are seeing in our day-to-day market activity.
Median prices, Sydney (Source: APM)
“ The Sydney housing market continues to track at record levels, with the July auction clearance rate at 75.9 percent – the highest ever recorded for that month and the second highest monthly rate on record.
Seller activity is responding to strong clearance rates, with Sydney auction listings in July 16.4 percent higher when compared to July last year.
Sydney house prices are unsurprisingly on the rise as buyer competition for properties intensifies. The Sydney median house price rose by 2.7 percent over the June quarter, which was the highest quarterly rise recorded since March 2012. Sydney house prices increased by 4.2 percent over the first half of 2013, and were up a total of 6.7 percent over the whole financial year.
Investor activity continues to be a significant contributor to the Sydney housing market, with latest ABS lending data for New South Wales showing investors at record levels, and contributing to more than half of national home loan commitments.”
Post Election – What Then
Without wanting to get to an overly complex discussion, post election as mining moves from a construction boom to a stage of ongoing production it has been suggested that NSW may once again become a driving force in the Australian economy. Driven mainly by a big increase in construction activity, which is already on the increase and also by more infrastructure spending.
Such an outcome will have a big impact on the housing market. That is as long as the new government and the NSW government have the policy setting to encourage development, by actually doing things.
But I think this expectation not withstanding low interest rates and a shortage of supply goes some way in explaining why the current market is full of confidence as we approach election date.
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