Buyers desperate to get their hands on the few homes available this spring have pushed auction clearance rates higher across the city in October, but there is one part of Sydney where competition is particularly fierce.
Staggeringly, a near 9 out of 10 properties (88.7 per cent) on the lower north shore sold at auction over the month. In September, those figures were even higher with a clearance rate of 90.6 per cent.
That’s significantly more than the citywide average clearance rate of 77.4 per cent for October, and 8 per cent higher than the neighbouring upper north shore’s 79.1 per cent clearance rate.
According to Domain’s chief economist Dr Andrew Wilson, the citywide drop in stock levels this year has been particularly pronounced in the prestigious lower north shore market, which was slow to activate during the current four-year cycle.
“A little bit of catch-up energy has driven this particular market over the past 12 months,” he says. “There’s still some value aspect in the lower north shore market, and buyers are swooping on everything that’s available.
“But cycles aside, to get a full month’s clearance rate at that level is quite an extraordinary result.”
Justin Ferguson, owner of the boutique Cammeray agency Justin Ferguson Property Specialists, agrees that stock is running particularly low after a late-cycle surge on the lower north shore. “My gut feeling is that stock levels in Cammeray are down close to 50 per cent,” he says.
“It’s one of the most incredible situations I’ve seen in 20 years in the business,” adds buyer’s agent Peter Kelaher of PK Property, which has an office in Mosman. “The agents are crying out for more property.”
Anthony O’Gorman, of Mosman agency O’Gorman and Partners Real Estate, cites market exhaustion after a strong run for sellers this year. “Now, almost everyone who could have possibly sold has done so.”
The situation is mirrored across Sydney, albeit to a lesser extent. Citywide, average weekend listings for October were 594, compared with 810 in October last year.
That decrease is normal at the end of a cycle, Dr Wilson says. But with current economic conditions like low interest rates encouraging investors not to sell, the situation on the lower north shore may become prolonged.
According to Peter Kellaher, “All the stars have lined up for people not to sell. The natural market is not operating. There are only three Ds in the market at the moment: downsizes, deaths and divorces.”
Ferguson, who sold all five of the Cammeray properties he listed for auction in October, says clearance rates on the lower north shore are also being boosted by a surge of interest from owner-occupiers, who often bid more emotionally than investors.
“If you asked me 12 months ago, I would have said there were more investors than owner-occupiers bidding in this area,” he notes. “Now, that’s reversed.”
Ferguson suggests that demographic changes on Sydney’s north shore – primarily an ageing population – are making centrally-located and amenity-rich neighbourhoods like Mosman and Cammeray more attractive to owner-occupiers who may have previously lived further north of the city.
For the lower north shore market, it all amounts to unprecedented competition among those looking to buy – and property watchers expect the extraordinary situation to continue for some time. “I can tell you now, we’ve got another 12 months of this at least,” says Kelaher. “It’s unbelievable.”
Article from Domain.com.au
http://www.domain.com.au/news/lower-north-shore-in-uncharted-territory-as-auction-clearance-rates-soar-20161031-gsew9k/