Why the current Sydney housing boom could be unprecedented
Sydney’s housing market is booming again due to a “perfect storm” of low interest rates, pent up buyer demand and a shortage of available housing.
It has seen prices skyrocket in recent months and the major banks have forecast significant rises to occur over the year.
Commonwealth Bank this week released projections showing Sydney prices could jump by 20 per cent over the next two years. Westpac earlier forecast growth of about 8.5 per cent over 2021.
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The modelling came as realestate.com.au data showed there were 53 per cent more “serious intent” buyers in the national market over January than over the same period in 2020, before the pandemic hit.
Crowds at a recent auction in North Bondi. Picture: Sam Ruttyn
In NSW, buyer demand quadrupled in the most popular markets and queues of home seekers have been snaking down the street at open for inspections.
Buyers have been vacuuming up almost anything that comes on the market – last week more than 90 per cent of the auctions across Sydney were a success.
This was well above the long-term trend of about 65 per cent for weekly auction clearance rates, according to CoreLogic.
Agents reported frustrated buyers are often resorting to vicious tactics, especially in the pressure cooker northern beaches market.
A crowd outside the auction for 18 Chandos St, Manly on Saturday, February 20, 2021.
Stone Real Estate agent Eddy Piddington said some beaches buyers aren’t even touring properties and simply make offers as soon as listings go online.
“We never had that before, not in the 17 years I’ve been in real estate,” he said.
“People do this when they’ve missed out on multiple properties and the frustration builds up.”
Close to 60 per cent of the buyers Mr Piddington met in recent weeks claimed to have missed out on prior sales, he said. “They say to us, ‘what do I have to do to get this?’ No one wants to keep missing out.”
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One veteran agent, who wished to remain private, told The Daily Telegraph “things were about to get messy” for home buyers.
“It’s a rising market and people are starting to lose their marbles,” he said. “It’s herd mentality. In a falling market you struggle to get offers out of buyers, but when it’s strong there’s a rush.”
Auctioneer Scott Kennedy Green (left) at a Maroubra auction that attracted 50 bidders. Picture: Dylan Coker
Real Estate Buyers Agents Association president Cate Bakos said a lot of buyers were being “reckless”.
“We’re coming against people who won’t order building inspections, they just throw out offers at the opens.
“Not even we can move that fast. We have solicitors we can call up at 12am to sign contracts if we need them to, but there’s not much we can do when other buyers lose common sense.
“It’s like if you’re not in the front third of the queue at the open for inspection you can miss out.”