The days of large-sized mortgages with large amounts are over due to stricter lending standards being introduced by the financial regulator in Sydney, Melbourne and elsewhere in Australia.
APRA, the financial regulator, is concerned that borrowers are borrowing too much. There are two options: limit the amount of money borrowers can borrow, and require them to deposit more.
It is due to Sydney’s insatiable desire to buy property. This led to the highest September clearance rates ever. Over the past four years, the state government has been collecting stamp duties in excess of a million dollars each month.
Already, listing prices have risen with the ease of restrictions. Auctions will resume normal business next month. They usually close around Christmas time because of the summer break. However, it is expected that they’ll continue until December.
The clearance rate in Sydney was 85.33% during the weekend of September. This was higher than the August clearance rate of 83.9% and more than the September clearance rate of 71.4 percent.
The Sydney result was the highest September clearance rate ever recorded.
My Housing Market found that, despite being in lockdown, Canterbury Bankstown had the highest weekend clearance rate with 91.7 percent. The Upper North Shore came in second at 90.8 percent, while the Northern Beaches was at 88.7percent.
Clearance rates across all regions were higher than 80 percent in September.
Except for the West, which was just under $973,500; the lowest north saw the highest median weekend house auction prices of $3,097.500 in September.
The lockdown caused listings sales to plummet. However, auction prices have risen 6.3% since June and 26.7% since September respectively. This stamp duty helps the state government pay COVID-19 recovery plan.
Revenue NSW figures show that stamp duty collected in July and August was more than $1.1billion. In June, almost $1.2billion in stamp duty was collected. In May, it was more that $1billion.
Only three months have passed since the state government collected more stamp duty than $1,000,000, and those were December 2015, December 2016 or December 2018.
The Treasury will continue to be overloaded with the most hated taxes in the state and no reform, despite increasing listings.
Andrew Wilson, My Housing Market chief economic economist, stated that champagne corks were going to be popping up in Macquarie Street to celebrate the “rivers of gold” they have.
“Auction numbers have risen sharply over recent weekends with listings set to surge by at least 50 per cent over the remainder of spring – and higher if outdoor auctions are allowed again,” Dr Wilson told .
Buyers who are experiencing stock shortages right now will appreciate the possibility that 10,000 homes could be sold under the weekend hammer within the next three months.
Dr Wilson stated there will be an immediate market start for property by 2022, mainly due to increased demand and opening borders.
Ray White NSW agent Alex Pattaro said that many sellers prefer to sell online auctions to onsite. There has already been a significant uptake of listings. There is no reason for property prices to fall due to the strong buyer demand and low interest rates.
He predicts that expats will return to their homeland once borders are opened. Demand will continue to rise due to both domestic and international movement.
“Auctions tend not to dry up early December, but it’s not unusual for auctions that continue until Christmas,” stated Mr Pattaro.
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