DEMAND for Sydney property is hotter than ever, with prices predicted to accelerate in the spring quarter.
Despite speculation of a looming crash or “bubble burst”, new data compiled by REA Group reveals demand is actually at its highest in three years and double the national average.
It comes as experts tip price growth will speed up in coming months.
REA Group chief economist Nerida Conisbee said despite cries of an apartment oversupply, Sydney’s market was facing a construction shortage long-term, both for units and houses.
“In August demand for property in Sydney rose 6.6 per cent compared to 2.6 per cent for the rest of the country,” Ms Conisbee said.
“We measure demand using overall listings versus the interest in a property and since we started the index in 2013 we’ve never seen demand for Sydney properties as high as it is.”
While the rest of the country was leaning towards more affordable favourites, Sydney’s fastest moving suburbs included blue ribbon patches Vaucluse, Woolloomooloo and Bellevue Hill.
“Three of the top 10 suburbs in highest demand are in the Central Coast and represent affordability but the other seven would be considered high-end areas.”
Auction clearance rates have also remained stronger than this time last year, with CoreLogic figures showing rates have been above 80 per cent for the past four weeks.
Last week 85.1 per cent of homes that were taken to the bidders sold — up dramatically from 70.7 per cent the same week last year.
In the eastern suburbs, Sydney’s most elite area, rates were at a whopping 94.2 per cent. CoreLogic head of research Cameron Kusher said with new listings still down by 20 per cent from this time last year, sellers had the upper hand.
SQM Research managing director Louis Christopher said Sydney doomsday market forecasts were “rubbish”.
Mr Christopher said Sydney saw a modest 2.8 per cent rise in property prices over the three months to June according to the latest ABS statistics. He thinks that the market was likely to rise at a faster pace from here.
“The affluent areas, including the eastern suburbs and inner west are doing particularly well,” he said.
“Our numbers are showing suburbs in some of those areas recording growth as much as 15 per cent.”
Aussie Home Loans founder John Symond, however, said while historically low interest rates were creating hot competition in some suburbs, he was concerned that some pockets of Sydney were facing an oversupply of units.
“It is unusual that there are areas of Sydney that are on fire with prices, while others are not travelling as fast.
“Those areas close to public transport and the CBD should continue to be resilient as younger people are seeking to live close to them.”