The heady days of Sydney’s runaway property boom look to be over, with the number of buyers searching for homes and kept a lid on price growth.
Not even reassuring words by the Reserve Bank governor, Glenn Stevens, on Tuesday that interest rates were likely to stay low for some time yet would be enough to kick start the momentum again next year, they say. Auction clearance rates have been falling for the past two weekends as a record number of houses and apartments are rushed to market before Christmas. Last Saturday’s rate of 74.3 per cent was the lowest since July.
This Saturday another 900 homes go under the hammer, with similar numbers for the past few weeks.
Domain Group’s senior economist, Dr Andrew Wilson, said while it was not unusual for properties to flood the market in November, two years of soaring prices coupled with a soft economy and flat wage growth had pushed buyers’ affordability to its limits.
“We’re certainly seeing a waning of house price growth in Sydney,” he said. “There is no surge in activity in our economy that’s pushing up real incomes to give us the capacity to keep bidding up house prices.”
He predicted that the slowdown in price growth would continue next year, even if there was a cut in interest rates. Growth would still be healthy for home-owners thinking of selling. “They shouldn’t be sneezing at 5 to 7 per cent growth following what’s been 30 per cent growth over the past two years.”
In the past few weeks agent Shaun Stoker of Ray White Surry Hills, had seen half the number of bidders at auctions in Newtown, Erskineville and Alexandria, traditionally among the most popular areas for buyers in inner Sydney.
While this weaker demand was not forcing down prices, few properties were achieving the stellar results of earlier in the year. “More stock is having an impact on the number of buyers at each auction, which is having a bearing on the price,” Mr Stoker said.
The Sydney Morning Herald, November 22-23 2014. News p.21