Sydney Property Market Continues to Defy

August 09, 2017 - by Fletcher Rowe - in Home Loans, Home Prices, Investment, Property market

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Fletcher Rowe | August 9 2017

Sydney property prices have again edged higher, according to CoreLogic’s latest weekly report released for the first week of August.

The report released last week showed that surprisingly high auction clearance rates were keeping the market competitive and turning around what threatened to be a slump after a sluggish end to July.

Expert advice from a mortgage broker could save you thousands. Photo: IFA Mortgages & Finance


Sydney’s clearance rate of 71.1% again failed to surpass Melbourne, with 75.7% of homes actually selling.

But this figure was a significant turnaround from the previous week’s 65.4%, which was the lowest so far this year.

SQM’s Louis Christopher forecast Sydney’s property prices to rise between 11% – 16% for the 2017 calendar year, but was hesitant to provide a forecast for 2018, citing RBA cash rate rises and further aggressive action from the regulatory body, APRA, as the major drivers of uncertainty. 

Most analysts agree, however, that this growth should slow through the December quarter and into 2018.


Investment bank J.P. Morgan mirrored this. 

“Given that investor lending was a key marginal driver of the most recent upswing in Sydney and Melbourne prices, we expect that, absent a significant pickup in owner-occupier mortgage growth, capital city house price growth will continue to moderate this year.”

Recent rumblings amongst analysts have suggested that interest rates were due for a hike, after what has been over 12 months of record low cash rates. A potential rate rise in November would be the first in 7 years.

APRA recently announced recommendations to strengthen banks’ equity targets and has set a higher target for the RBA cash rate at 3.5%. This could further widen the gap between variable mortgage rates and the cash rate, as banks try to protect their profit margins and shareholders.

A rise of 50 basis points could be enough to drive investors away from the property market, according to a CoreLogic report released in May.

Likewise, NAB Chief Economist, Alan Oster, noted increased activity among first home buyers during the June quarter, accounting for 35.7% of all new property sales – the highest level since NAB began tracking this statistic in 2014.


                                                     “Clearly, tougher measures on banks                                                                                                      announced by regulators to rein in investor                                                                                                   lending are being felt in this segment of                                                        the market” said Mr Oster.


For home owners and investors, this highlights the need for expert mortgage advice to find lenders and products that are suited to you. Find out how these changes will affect you by contacting IFA.

IFA Mortgages & Finance are a free mortgage broker service. Discover what it means to talk to an experienced lending expert who  will develop a buying strategy that is tailored to you. 


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