New positivity & price lift
October was monumental for Sydney homeowners and BresicWhitney.
While we felt a return to selling via auction (usually a sign of confidence), the city was in the middle of a price upswing.
Numbers just in from CoreLogic show Sydney property values trended upwards for the month, the first increase since they started falling consistently from April.
Sydney house prices jumped 0.5% over the month, while apartment prices tracked a little weaker, slipping 0.5%. Overall median property values were up 0.1% – a huge turnaround from the start of COVID-19.
Every capital city apart from Melbourne recorded a bounce back in property prices. The price drop down there was also the smallest recorded since April.
At the top end of Sydney, the city’s most expensive 25% of homes had reportedly been sluggish, but October delivered new energy and a 0.3% price increase.
With premium housing often leading the wider downturns and upswings, we’ll be watching to see if higher value properties gather further momentum.
While today’s buyers are still proceeding with sensible caution, the past 12 months have seen Sydney’s annual property value remain up 6.1%.
CoreLogic head of research Eliza Owen called the numbers “quite remarkable”.
“We also saw a sharp rise in consumer confidence, with the Westpac-Melbourne Institute consumer sentiment index up about 12% in October,” Ms Owen said.
“What we should keep in mind is that negative economic shocks don’t necessarily always affect the housing market, because it coincides with a time when the Reserve Bank is trying to stimulate the economy by making the cash rate very low.
“The impact that has on mortgage rates tends to have an upward pressure on property prices.”
The October figures have landed ahead of the Reserve Bank’s expected decision to lower the country’s official cash rate to a new historic low. It already bottomed out in March at 0.25%.
The return to the auction method we saw at BresicWhitney last month formed part of this momentum. We saw fewer homes withdraw from auction campaigns, more properties selling prior, and more owners going all the way to transact under the hammer.
With owners having new confidence, we saw weeks where nothing was withdrawn or cancelled, and last weekend we hit 92% clearance. With 44 registrations across 5 auctions, the number of people ready to bid was also impressive.
We finished with 101 sales, a record month for 2020.
BW Head of Sales Thomas McGlynn says the increase in campaigns running through to auction day indicates a strong depth of buyers across many price points.
“The resilience of the Sydney property market throughout COVID-19 has been quite extraordinary, largely led by strong buyer demand and low stock levels across the higher end of the market,” Thomas says.
“Although the investor market still hasn’t returned to its pre-COVID levels, we have seen first-homebuyers re-enter the market with confidence, propping up prices for inner-city homes.”
The market hasn’t roared back to life. But in this trying year, another layer of confidence has been restored.