Sydney property smashes more records

CoreLogic’s March dwelling value results recorded a whopping 3.7% monthly rise in Sydney home values, which was the strongest monthly result since August 1988:

Sydney monthly dwelling value growth

Sydney recorded the strongest monthly growth in nearly 33 years in March 2021.

As of yesterday (i.e. 6 April 2021), Sydney’s quarterly dwelling value growth was tracking at an insane 7.1%, which is the strongest quarterly growth since October 1988:

Sydney quarterly dwelling value growth

Sydney’s quarterly dwelling value growth (7.1%) is the strongest in more than 32 years.

Thus, the last time Sydney’s property market was this strong was in Australia’s bicentenary year, when Kylie Minogue’s debut hit Loco-Motion was topping the global charts.

The strength of Sydney’s property market is reflected in the city’s auction clearance rate, which has remained above 80% for eight consecutive weeks:

Sydney auctions

Sydney’s auction market has gathered steam, with clearances well above 80%.

New mortgage finance commitments are also running hot, reflecting the strong demand for Sydney property:

Sydney mortgages vs dwelling value growth

Sydney’s mortgage demand has gone vertical.

We’ll know that prices are about to slow when Sydney’s auction clearance rate and mortgage growth starts to turn down.

Unconventional Economist
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Comments

  1. pfh007.comMEMBER

    Wow who would have predicted that the RBA implementing insane QE, ZIRP and TFF policies would have ignited an insane response from the Sydney property market?

    Lots of people.

    Funny enough all those who were demanding that the RBA take the insane policy option have not issued mea culpas and started demanding that the RBA reverse course and try less insane policy options.

    Instead yesterday the papers were full of double down!

    https://www.smh.com.au/politics/federal/the-central-bank-under-fire-has-the-rba-failed-australians-20210315-p57auu.html

    • fitzroyMEMBER

      It is very important that the rich get richer and that workers cannot afford a house without a 30 year mortgage. Someone has to confiscate savings by the Cantillon effect and debase the currency. It is a long time since 1959, the people of Australia have had their country stolen from them.

        • fitzroyMEMBER

          Read the plaque outside the RBA’s building. It is photographed in 007’s link. It is dated 1959 and comes from the RBA Act. It represented a country where the people once counted for something. In 1966 the 50 cent coin was 80% silver and weighed about a third of an ounce.

          • boomengineeringMEMBER

            Thanks, thought you were going to bring up 72 year generational cycle and start of credit card etc dept serfdom.

        • pfh007.comMEMBER

          Fixing the RBA is not a complicated or difficult project.

          Fundamentally all that is required is to open up access to RBA deposit accounts to non-banks and the general public.

          People don’t have to open an account if they don’t want to and the accounts will pay no interest.

          But just having that option for that portion of your savings that you want to be highly liquid and risk free will end the bank monopoly on ‘deposit’ accounts and starts the process of a lot of other reforms including ending the public guarantee on unsecured loans to the private banks (which is all that your ‘deposits’ with the private banks really are….unsecured loans.

          Can there be anything more distorting than giving one industry a public guarantee on any unsecured loans they accept from the public?

          If you have a problem with the dominance of the private banks and the debt driven asset price pumping that passes for “economic management” in Australia, the only way of addressing that problem is by permanently ending their monopoly on deposit accounts at the RBA.

          https://theglass-pyramid.com/2018/11/03/fixing-oz-banks-pt-7-what-should-be-the-role-of-the-rba/

          Effectively giving non-banks and the general public access to RBA deposit accounts is the introduction of a Central Bank Digital Currency as the chart of deposit accounts (and transaction records) is effectively a form of “block chain”.

        • Ronin8317MEMBER

          Intergenerational debt. A child will be born with it, and have to pay it off for their entire working life simply to have a roof over their head, and their child will inherit it as well.

          • You must not use such an inhumane term like slave which would only be appropriate to describe an entity that belongs to a single owner.

            You must instead use a more precise and humane term to describe a shared entity, like casual worker.

    • Andrew Veniamin

      There is no boom – see post below.

      Also – there is a supply tsunami across Australia as tennants are evicted as desperate people try and sell their homes. Hence stock is piling up if you look at SQM research which shows the actual real data and not “the vibe” as Core Logic does.

      https://www.abc.net.au/news/2021-03-29/wa-rent-moratorium-ends-with-families-forced-onto-street/100035342

      The spruik is possibly the most dishonest thing I have seen in my 50 years in Australia, worse than “game of mates” and those engaging in it, or PROFITING FROM IT, should be utterly ashamed. Total sell outs.

    • Insane response from the Sydney property market? Hardly.

      Back in 1998, just before the current 20 year-old housing boom took off, 1 kg of gold was worth about 15,000 AUD and a typical house was worth about 150,000 AUD. So, a typical house was worth about 10 kg of gold back then. Fast forward to 2021 and 1kg of gold is worth about 75,000 AUD and a typical house is worth about 750,000 AUD. So, a typical house is still worth about 10 kg of gold now.

      Meanwhile, the median weekly full-time wage was 842 AUD or about 2 oz of gold back in 1998. The median weekly full-time wage is 1713 AUD or about ¾ oz of gold in 2021. With the Zimbabwe solution (or those with a more historical bent may prefer to call the Weimar solution) taking hold, you don’t have to be an Einstein to figure out what is going to happen.

  2. boomengineeringMEMBER

    1974 Commonwealth of Australia taken off banknotes. Commonwealth meaning the common people owned the wealth of Australia.
    Horrible how our history is so censored.

      • boomengineeringMEMBER

        14 Jan 1960 RBA started operating so that’s what threw me.as I’m on the phone which didn’t show the pics without delay so skipped them . May look up 007s whole link soon in piano/machineshop/computer room.

        • fitzroyMEMBER

          Here it is: The original s 10(2):

          It is the duty of the Board, within the limits of its powers,
          to ensure that the monetary and banking policy of the Bank is
          directed to the greatest advantage of the people of Australia
          and that the powers of the Bank under this Act, the Banking
          Act 1959 and the regulations under that Act are exercised in
          such a manner as, in the opinion of the Board, will best contribute
          to-
          (a) the stability of the currency of Australia;
          (b) the maintenance of full employment in Australia; and
          (c) the economic prosperity and welfare of the people of
          Australia.

          By these criteria it has been a total failure and should be scrapped. There is no reason why it should not be accountable directly to the people. There should be no independence from the taxpayers and should be subsumed into treasury. It is one of a class of autocratic reserve banks who print money and are answerable to no one. They are the most powerful arm of government and have been in the business of enriching asset holders and impoverishing those who do not hold assets, the working poor. They have been instrumental through lobbying to ensure that the price of land was removed from the CPI, so that the people could be impoverished by the Cantillon effect and not even know it, because of bogus statistics. The inflation rate is said to be constituted by the price of a basket of goods and not the increase in the amount of broad money. Hence one can print money until the cows come home yet not act as if you are debasing the currency and pinching purchasing power from savers. Every one of the prescribed criteria above has been disregarded.

          We have a bank that is a parody of what was contemplated by the law.

          The only people it serves are the idle rich. They are not even Australian.

  3. Andrew Veniamin

    Core Logic methodology is entirely secret and is hedonic – it relies on the “characteristics” of a suburb and is self reported by real estate agents and according to core logics absurdly effluent, yet entirely without substance self promotional material is better that the actual real data relased by the ABS and Valuer General – for reasons which are secret.

    https://www.corelogic.com.au/research/rpdata-corelogic-home-value-index

    If you look at the actual real data of Sydney it has increased by around 6% – these are the actual real prices being asked. With sold records confirming this. At the same time stock is trending back up towards the 2019 crash – you can see above which reversed Sydney prices by -28% according to Core Logic.

    Almost every other city is stable or down. So who is lying ? The secret index which uses suburb characteristics and “not just house prices which dont tell the full story” – or the index which is showing the actual prices listed on real estate websites and submitted to the ATO and ABS. (The same data Core Logic ridicules in their spin – the actual prices).

    https://sqmresearch.com.au/asking-property-prices.php?region=nsw%3A%3ASydney&type=c&t=1

    • Hi Andrew – can you provide data that backs up the claim “with sold records confirming this”?
      Where I am the asking prices from a year or so ago were not being achieved (ie the sale was a discount to the original asking price). Now I see the crazy situation where the asking price is either being met straight away or even exceeded.

      Northern Beaches of Sydney is defn more than 6% up.

      I appreciate some on here are predicting a crash and many hope it happens but the reality on the ground is that we are currently in a boom. I have NFI what will happen going forward but to argue the market is just plodding along and the stats are juiced doesn’t align with the on the ground reality where I am.

      • Andrew Veniamin

        Sorry mate I am really not debating – “this is not happening in my suburb”. Of course every suburb is different. But follow the links above and you will see that the broad trend across the country is VERY different from that being portrayed.

        Hobart is in fact booming – but it is a TINY fraction of the market. Sydney is indeed going up overall by around 6%.

        You can refine your search down to your specific suburb for more information.

        As far as the market goes please consider this : Almost every commentator, speculator, investor said the same thing at the start of this pandemic – the market will BOOM due to the stimulus then in March it will begin to recede then collapse by November. Go read over the threads from Feb, March last year – its all there. Total agreement on even this forum.

        Then things changed and the spruik began…..

        The fact people have jumped in and bought is mind blowing levels of dumb – but is exactly how the Australian psyche works – there is no chance of a correction EVER so always buy now and as much debt as you can. (2019 say a 28% DROP in house price growth to minus 12% in Sydney – SEE ABOVE).

        We have had a massive building boom – unprecedented – on the back of a once in a 100 year population crash – for prices to go up is an economic impossibility outside of a fabricated / rigged scenario. Yes that is the Job Keeper effect, mortgage moratorium, tennant eviction moratorium, insolvency moratorium – all of which ended less than ONE WEEK AGO.

        Watch this disaster unfold in epic proportions.

  4. This is the price action consistent with the final stages of a bubble ….

    One thing I can say for sure, it’s pretty obvious who will be blamed when this all unravels

    This final stage of the bubble should be dedicated……

    It’s the final Reusa stage

    • boomengineeringMEMBER

      My lengthy RBA comment is awaiting moderation and will probably be canned. Relaying conspiracy of only 3 countries left by 2011 without central bank subluminal ownership.

      • What’s the general theme of it ?

        Let’s see if we can pull a 10% QTR growth in Q2
        Let’s also see if we can get to btw 95 and 100 clearance rate

        Boom every article next year will be the blame game on the RBA…..

        Sydney property market will easily be the worst hit in this crash

          • I did write yesterday but yourself TT and JOHNR were asking on the weekend
            The key I think is market is building long DXY and bullish DXY sentiment and market is extreme short bonds …..
            Think US and AUST 10 year bond yields could fall back to 1% around
            The USD.( DXY)to crash into low 80s or very high 70s
            That’ll send the NASDAQ into orbit ……high tech growth 🚀……..NASDAQ may touch 20,000
            Note in 1999, NASDAQ was at a similar level and then broke again for a blow off …..80% higher
            Think we are now on the edge of hitting the parabolic vertical stage ……Nasdaq S&P DOW will just skyrocket
            Commodities continue major super cycle …..
            I’ve always been a bear on the AUD but we may see up towards 90c
            If we see this gold should take out 2020 highs
            I think SYD property prices are already in the vertical blow off final parabolic move up …..think sharemarket next ……if commodities run up on crashing US dollar inflation is going to really get out of hand
            Key is US 10 year yield and dollar,,,,,but think everything is aligning for the final parabolic vertical move up
            All the big players are caught long dollars and short bonds here…..it’s going to possibly be a blood bath on Wall Street

          • The Travelling Albatross

            Yep, seems everyone cramping in the vertical up rocket and no space for more in the cockpit

          • TA
            I think if my AUST 10 year yield play down towards 1% and commodity boom this QTR with surging AUD
            Think If we break 7,000 on ASX200…..we should test 2019/2020 highs of 7190……if we break into 7200s, think it’s a run up to 8,000
            Think money will pour back into our market with higher commodities
            Think we are at an interesting inflexion point

          • The Travelling Albatross

            It all depends on what’s will happen with usa
            at this stage then, and how their money will pour into here

    • If you want to change the RBA’s policy actions, you need to change its mandate. Tighter monetary policy -> strengthening AUD -> less competitive exporters -> higher local unemployment. Remove the full employment mandate if you want to change policy settings. They are just trying to do their job.

        • Andrew Veniamin

          Bank failure – which is what is coming via the crash – means no jobs.

          Pretty sure that is substantially worse than modest interest rate rises.

          • Cynical snake

            In case you haven’t noticed the RBA is going to print all the money required to save the banks, and probably prevent the crash as well.

          • It’s all good…entitled folk have had months of forced lock downs which they willingly submitted to. They practiced walking at allocated times, knitting, sewing, self sufficiency, vege patches & engaging with their offspring & lots of net flux etc. No jobs will be a breeze.Thanks Dan xx

        • Cynical there is absolutely no way the RBA can save all the banks
          AUST will be in a depression much worse than 1930s next year
          This is truly so big now, it’s going to destroy AUST for years
          It’s going to be a very painful period for AUST from later H2 this year
          We will be probably the worst hit in the world

          Andrew some banks will just have to be sacrificed

          • Display NameMEMBER

            Unlike the US where the major banks market cap are ~6 % of their market, the 4 big banks in Aus are 24-26% of the ASX200. They are the economy. And the major shareholders are offshore, US and to a smaller extent UK banks. They will want their pound of flesh. The big banks will be saved in a systemic event, even if bail ins are required.

          • @display
            Yes i agree with everything you have said
            They will stop at nothing

            But truly I think this is so big there will be nothing they can do……
            I know what you are saying ,,,,,but I just feel we are past the point of no return now

            I know it may sound extreme but there may not even be a bail in bail out, it’ll be just shut the door

            I know it’s hard for everyone to see, but UK US etc will be busy saving themselves

            Display it’s not possible to fully bail out or banking system because there is no property boom afterwards

            Truly there will be no choice but to restructure and start something from scratch, everyone will pay for this mess

            And this Sydney property bubble ….how they let this happen …..is really beyond me

        • Cynical you are absolutely correct
          This downturn will combine all of the last 6 that were going to happen but they kept juicing
          I’m honestly shocked what the RBA is allowing to continue
          Our financial system is right on the edge

          You are going to see an all on 1 crash….that’ll be one for the history books

          The crash will be mostly over by Xmas this year

          It won’t be drawn out, it’ll be over one quarter ….I’d say 4th QTR this year into early 22

          Sydney will lead the way down

          Not all AUST banks will survive this one and there won’t be the power to bail all out

          This is just too big now

    • Andrew Veniamin

      Especially since doing so counts against your credit rating and precludes you from getting a loan. ATO is investigating people who lied about their circumstances and drew down on super, main focus is loan applicants.

      So no.

      But if you see my post above you will notice that its MORE amazing what outright lies, fabrication and propaganda can do for the average punter who will believe anything.

      • boomengineeringMEMBER

        Well all that super money went out of the punters hands into the RE vendors hands, then punters lose all in downturn ending up with no retirement money.. Lets see if they, now rich vendors can hang onto it all after bncich’s apocalypses.

        • Andrew Veniamin

          No – it did not. This has been covered ten thousand times – you could NOT use Super to purchase a house or use it as a deposit – it was for emergency reasons only.

          Banks would refuse you a loan if you had accessed early super.

          Granted there were some builder lenders who were using it but very few – and even then the ATO is all over it like a bad rash.

          So absolutely 100% false.

          • Ronin8317MEMBER

            The first batch of super fund release was ‘no questions asked’ : you merely have to claim that your working hour was reduced. Plenty of professionals got their money out this way as it means paying less tax.

          • Cynical snake

            In case you missed all of last year, the super release rules were heavily relaxed for the big C.
            All you needed was reduced hours, not an emergency. And the banks absolutely DO NOT CARE if you accessed super via this mechanism. Unless you have some definite proof of this? Or just hearsay from someone whose a bit out of date?

          • Guaranteed 100% true the big four blacklisted anyone who accessed super if they applied for a loan. That’s directly from a level 2 who’s been asked to apply for an upcoming CEO vacancy.

            But, lower tier lenders couldn’t give a toss and it’s like shooting fish in a bucket for a hungry mortgage broker. Case in point was a mate who was told by Westpac that he needed to cut up his credit cards to get approval on a construction loan to finish a build. He tells them to stick it, goes to the local credit co-op and suddenly he’s got approval on the construction loan, a loan on another block of land and $400K redraw on another property to top up his super and ‘throw into the sharemarket’!!!

            If the big four weren’t playing nice, the Government has gone straight to the next tiers and used them as the vehicle to distribute the debt.

          • “Banks would refuse you a loan if you had accessed early super.”
            On what basis? Did they contact ATO for every single transaction and confirm whether ATO had any records of super withdrawal?
            Let me guess, they had a tick box on a form somewhere that asked the punter “Did you access super during this crisis?” And relied on the gambler to be truthful on a form somewhere…
            This is how it’s worked in aus for a long time – ask the person who benefits from the transaction to let you know of all the things that would stop them from the transaction going ahead. It’s the idi0cy of conflicted interest across everything… banking, politics, real estate, gas industry, super industry… everywhere is the same blind eye to conflict of interest.
            And then when it all comes unravelling because you cant possibly hide the rot forever, it’ll all come as a “whocouldanode” surprise…. or scummo’s favourite “didnt know that was happening in my own building!!!!”

      • FUDINTHENUDMEMBER

        I know folks whose super withdraws went to housing deposits last year (one couple basically had no other savings). Got all the grants and such. No way the ATO gonna go after everyone who pulled super money when Jerry Harvey walks away with gazillions in free jobkeeper. Folks would riot.

      • “Especially since doing so counts against your credit rating and precludes you from getting a loan.” Do you know if this has happened to anyone?

        My circumstances last year enabled me to draw down my super, twice. Hours cut, hence reduced income, have since recovered hours/income, and didn’t really need to draw down, just did it cause I could, and would rather hold in my hands anything that’s mine. My experian credit score went from 881 (last year) to 901 (recently). Go figure. I’ll give it another check later this year, see what happens.

    • Andrew Veniamin

      Just to clarify this – as super was NOT being used as deposits etc – but the $600 Billion stimulus Job Keeper etc TFF absolutely WAS allowed to be used.

      You could walk into a bank having zero job, zero chance of ever having your job returned and get a loan approval due entirely to Job Keeper – that was its purpose – to hide the fact you did not have a job.

      Not only this a young couple doing ONE SHIFT a week at Coles for example prior to Covid would qualify for a $600-$700k home loan with the deposit covered by FHB schemes due to Job Keeper.

      There are literally tens of thousands of people with home loans who are about to get smashed.

      Hence why the banking task force was set up to deal with the avalanche of failed loans in March.

      This is not just for “deferred loans”

      https://www.businessinsider.com.au/australia-loan-deferral-march-expiry-repayment-options-2021-2

      • Cynical snake

        This is so much BS it isn’t funny, but it’s ok I know you don;t want to get into a whole debate about FACTS or anything.

        The spruik is well and truly on……

      • Andrew, these young couples, who are just having a go, will sell their property for mega profits during the boom and the cycle will rinse and repeat, it is the Australian way. How good is Straya!

    • Insurer’s were freaking out over the potential for business interruptions claims from the pandemic as a lot of the policies intended to exclude claims from pandemics but the wordings referenced the old Quarantine Act which had been replaced in 2015 by the Biosecurity Act. As the dust has settled, turns out the risk isn’t all that great as a lot of businesses are in a better position than what they would have been but for the pandemic. SME business owners clearing a $1hungie more than they would have from grants, rent decreases/abatements, jobwhatevers also helps shack prices!

  5. The savings rate went up, jobless rate is nearly back to the level pre-COVID. Rates are extremely low, sorry folks there’s no cataclysm coming, we will have record growth in the economy and house prices this year. The growth will then soften as we find ourselves in the high debt, low growth, low inflation funk we were in before. Which means they won’t be able to raise rates again, it’s the same trap we’ve been in since 2007. We just got a massive can kicking through JobKeeper, super withdrawals and mortgage deferrals plus lower rates. The rising house prices with lower rates just released the mortgage prisoners from 2017/2016 they can now sell or refinance to lower rates. things will just keep rolling on just like they did in 2008, 2012/13, 2018/19 etc The pandemic has found a temporary cure to eye watering debt levels, fund the underlying capital of the loan with money from super and government assistance. This and the bank of Mum and Dad means this is going to run much further than any of us dare imagine.

  6. Save 80%. Have a vanguard account. Work from home. House sitting. Best way to enjoy life from this point.

    Very sorry for anyone who has a wife or kids (or aspires to it).

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