Sydney House-Sellers Demand Record A$1 Million Median PriceNichola Saminather
Sydney’s median asking price for detached houses topped A$1 million ($864,300) this week for the first time as sellers raised expectations in a booming market.
The asking price rose A$10,600 over the past seven days, according to Sydney-based data company SQM Research Pty. That’s the highest since the firm began reporting the data in April 2009. Across Australian state and territory capitals, the median asking price for detached homes jumped A$6,400 over the week to A$755,100, the figures show.
Record-low central bank interest rates are fueling a surge in demand from investors, which has regulators concerned that speculative buying is creating an unbalanced housing market. SQM forecasts values in the nation’s most populous city could rise as much as 12 percent in 2015.
“Right now it would be impossible to purchase a free standing house in Sydney’s inner ring for under A$1 million,” SQM Managing Director Louis Christopher said. “I don’t see any change in the immediate future. It’s going to remain a pretty strong sellers’ market.”
Sydney asking prices soared 23 percent for houses and 21 percent for apartments over the past three years. Across the country’s major cities, they’ve climbed 12 percent for houses and 13 percent for apartments in the period. Canberra was the worst performer, with asking prices plunging 12 percent for houses and 13 percent for apartments.
Sydney house prices rose 14 percent in October from a year earlier, according to the RP Data CoreLogic Home Value Index. The pace of growth is slowing: the 4.5 percent gain in the three months through October compared with 5.8 percent a year earlier.
“Price growth has moderated in the last few months,” said David Cannington, senior property analyst at Australia & New Zealand Banking Group Ltd. “The Reserve Bank is talking about increasing interest rates, so that will add some downward pressure on price growth.”
Cannington forecasts a 5 percent increase in Sydney dwelling prices in 2015. ANZ Bank forecasts a rate increase in mid-2015, he said.
The housing market has been underpinned by the Reserve Bank of Australia keeping its benchmark interest rate at a record-low 2.5 percent for 15 months. Investors now account for more than half of all new home loans.
The RBA has indicated that regulators plan measures to target speculation by people buying residential property as investments.