Sydney’s property market is set for a new boomJohn Karasmanis
Sydney’s property market is set for a new boom with an undersupply of homes predicted to fuel a spike in house prices.
Clearance rates have been sitting above 70 per cent for seven weeks as a limited number of new properties come onto the market. On Saturday, 734 auctions are scheduled for Sydney in the city’s biggest test of the market since Easter.
The auction weekend comes as data released by property analytics firm CoreLogic shows housing affordability concerns remain severe.
The report also reveals the proportion of Australians living with their parents who believe they will still be at home when they are 30 has jumped from one in five to more than a third over the last two years.
CoreLogic’s Asia Pacific research director Tim Lawless said the period of improved housing affordability caused by cheaper house prices was coming to an end.
“If you look at the numbers … we are going to be facing a situation with an undersupply of housing,” Mr Lawless said. “We are already seeing housing prices rise.”
Eliza Owen, a research analyst at Domain, said house prices were likely to rise because developers started work on fewer dwellings during the downturn.
“By the time they get their developments approved and commenced and completed there will be strong demand while we wait for that new supply,” Ms Owen said.
The Property Council is pushing for the scheme to be doubled to 20,000 buyers a year for the first two years, with the additional 10,000 places restricted to purchasers of newly built properties.
The Grattan Institute’s Brendan Coates told a public hearing on Friday that while a scheme capped at 10,000 a year was “unlikely to make much of a difference” to home values, any expansion would be “counter productive”.
“It would push up prices, benefiting sellers at the expense of first home-buyers, while increasing the risks of inappropriate lending at costs to both households and government” he said.
The CoreLogic survey of 2200 people found 34 per cent of those living at home think they will still be there when they are 30, compared to 20 per cent two years ago.
Across the population, about 80 per cent said home ownership was important, suggesting millennials are focused more on what they are struggling to achieve.
It takes prospective purchasers 11.2 years on average to save a 20 per cent deposit in the Greater Sydney region — the highest in the country, according to CoreLogic data.
Mr Lawless called for more protections for those who are forced or choose to rent long term as one measure to address the consequences of housing unaffordability.
“You can also have the discussion about is the great Australian dream … of owning your home unachievable for some,” Mr Lawless said. “We need to start looking now at different forms of rental tenancy where you can have certainty of where you’re going to be living longer than a six or 12-month rental agreement.”
Source: Sydney Morning Herald 28-09-2019