- More than 400 buyers turned up from early in the morning
- Sydney home prices up 3.4 percent in first 27 days of May
All 391 apartments offered by Lendlease Group at a project in Sydney were snapped up in just four hours on Saturday, indicating demand for inner-city homes remains buoyant despite looming oversupply.
More than 400 potential buyers turned up from 8 a.m. in Darling Square, a development on the western edge of Sydney’s central business district, for the apartments that were priced from A$630,000 ($452,000) for a studio to A$3.5 million for a three-bedroom penthouse, Sydney-based Lendlease said in an e-mailed statement.
The sellout at the project, the final stage of Lendlease’s 1,500-apartment development, comes amid renewed investor confidence after a regulatory clampdown led to stiffer lending standards for landlords. About 47 percent of new home loans were to investors in March, the highest in seven months, according to government data. The nation’s biggest lenders reduced their mortgage rates after the central bank cut its benchmark on May 3 to 1.75 percent.
Lendlease experienced “strong demand” from local buyers for the project, it said in an e-mailed response to questions, without elaborating. Though owner-occupiers accounted for two-thirds of the demand when the first two stages were sold, it was too early to determine the ratio for the latest stage, the company said.
The demand for the homes comes as 34,300 new apartments are due to be completed in the next year, with the number set to more than double to 81,696 in the next 24 months, as soaring home prices led to a building boom, according to research firm CoreLogic Inc. Sydney home prices have risen 3.4 percent in the first 27 days of May, it said in an e-mail Monday.
A federal election in July doesn’t appear to have put off potential buyers. As part of its election promise, the main opposition Labor party has pledged to end a tax break for property investors known as negative gearing, wherein they deduct the costs of owning a rental property, including mortgage payments, from their taxable income. The ruling Liberal-National coalition has vowed to leave it unchanged.
“It looks as if the upcoming election and debate around taxation policy hasn’t been enough to dampen the renewed bounce in home values,” Tim Lawless, head of research at CoreLogic, said in a statement Monday.
The Darling Square precinct is due to be completed in 2019. The A$3.4 billion project will house 4,200 residents, according to Lendlease.