Latest NewsSigns of Life As Sydney Auction Results Start to BloomSunday, 28 May 2017

More positive signs emerged over the weekend for the Sydney housing market. Auction clearance rates rose to the highest levels for the year and are now consistently tracking the results recorded for the same time last year.

The number of properties being offered for auction still remains below the level at the same time last year. However, the gap is narrowing week-by-week, indicating an emerging market environment more typical of Sydney's winter selling season.

The clearance rate at the weekend was 63.5 per cent compared with 52.6 per cent recorded the previous weekend and 65.4 per cent for the same weekend last year.

Of the 210 reported auctions, 148 were sold, for a total value of $117.7 million at an average value of $790,540 per property sold. The median price of houses sold was $827,500 and for units it was $610,000.

The most expensive property reported sold at auction at the weekend in Sydney was a four-bedroom home in Seaforth that sold for $2.36 million. The most affordable property reported sold was a three-bedroom townhouse in South Penrith that was auctioned for $251,000.

Other signs of increased activity in the housing market are emerging. First-home buyers have been relatively quiet this year but recent Bureau of Statistics data has revealed a rise in first-home buyer activity.

Just over 2550 dwellings were financed by first-home buyers in May in NSW, which represented a 17.5 per cent increase over April's total of 2175 home loans. This was the highest number of first-home buyer loans recorded since May last year.

Despite the monthly increase and the year-high totals, the proportion of first-home buyers in the marketplace remains low. Only 15.6 per cent of all home loans recorded in May were for first-home buyers, which is below the long-term average of 18.4 per cent.

However, the average value of first-home buyer loans has now risen for three months in a row, increasing from $294,300 in February to $312,200 in May, up by 6 per cent.

First-home buyer activity in Sydney should continue to increase through the year as affordability improves due to a relatively strong economy, rising incomes, continued stable interest rates, modest house price growth and high rents.

Sydney first-home buyers face a continuing struggle to secure property due to a general shortage of housing and chronically recessed levels of new housing supply.

Recent state government initiatives are designed to improve the supply of new housing, particularly for the first-home buyer market.

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