Cotality has released its final auction results for last weekend, which recorded a clearance rate of 71.7% for Sydney—the highest of the major capital cities.
Source: Cotality
Sydney’s clearance rate held above the 70% threshold for the third consecutive week, coming in at 71.7%—the strongest result in five weeks.
Sydney’s monthly average final auction clearance rate now stands at 71%, which is the highest result since February 2024.
The following chart plots the monthly average final auction clearance rate for Sydney against the quarterly dwelling value growth. As you can see, dwelling value growth typically follows auction clearances.
The spike in clearance rates, therefore, suggests that Sydney dwelling values should lift.
Indeed, at the national level, Westpac’s consumer sentiment survey reported that house price expectations have surged to cyclical highs. At the same time, an increasing number of people believe now is a good time to buy a home.
Cotality’s daily dwelling values index has also reported rising (0.8%) growth in Sydney on a rolling 28-day basis:
However, while indicators have turned bullish for Sydney home prices, it is important to point out that affordability constraints will likely temper the upswing.
As illustrated below by Justin Fabo from Antipodean Macro, Sydney home values are easily the most expensive and unaffordable in the nation, meaning that the upside for prices is limited.
The pool of buyers able to afford to pay more than $1.2 million for a dwelling in Sydney and take on a mega-sized mortgage is limited.
