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According to Domain, the Sydney auction market 'went nuclear' on Saturday with a record-breaking performance ahead of the Easter break. An unprecedented 1152 homes were scheduled for auction on Saturday, which was the highest ever weekend offering. The previous record of 1128 was set on the pre-Easter weekend of 2015. Sydney also recorded its highest ever number of weekend auction sales on Saturday with $760.9 million worth of property changing hands.
Source: Domain
So how long before the Sydney market reaches an un-lendable level?
Low mortgage rates are a key catalyst for continuing strong auction market conditions in Sydney. The Reserve Bank has again decided to leave official interest rates on hold over April. Rates have now been on hold since August last year when they were cut to the record low 1.5 per cent.
All indicators are that at a tipping point as interest rates rise (as they inevitably will), the Sydney market will have to slow or complete arrest the growth.
The positive side to Sydney and what is causing some of the rapid capital growth is the reality is Sydney is to some degree land locked. Mountain range to the west and ocean to the east, so the chances of any catastrophic bursting bubble are slim. BUT there is a point at which the banks will simply not be able to lend and that is the direction APRA is driving the lending policies.
History demonstrates that property and investment is cyclical.
All historical data shows that as the previous Sydney & Melbourne explosive growth markets have slowed, very strong comparative value shows itself in other capitals.
Currently the Brisbane market is approximately 50% lower cost or put another way 100% better value buying.
Growth shows Brisbane and SEQ as No #1 domestic migration destination. Melbourne and Sydney duke it out with the International and domestic migration.