Sydney apartment prices are 3 per cent higher than last March | Holmes

FORGET plummeting prices caused by oversupply, an investor collapse and disappearing Chinese buyers.

Sydney apartments are fetching 3 per cent more at auction this year than at the same time last year.

In the east and inner city, apartments cost 11.2 per cent more, while in the south prices are 12.9 per cent higher.

The picture is less rosy for houses sold at auction, with prices 3 per cent lower. However, the prestige market remains strong with house prices in the east 14.2 per cent higher.

The city views were a big part of the appeal for the buyer.

“It’s definitely a more positive market for apartments than houses and this kills stone dead the narrative about the risk of oversupply,” said economist Dr Andrew Wilson, who supplied the data.

He attributed the higher prices for apartments to the government’s stamp duty exemptions for first-homebuyers, introduced in July, and their relative affordability.

A young woman paid $925,000 at auction for this one-bedroom unit at A303/24-26 Point St, Pyrmont.

Downsizing empty-nesters are keeping apartment prices higher, while professional couples and families who can’t afford an apartment by the beach in the north or east are heading to Cronulla.

Agents say the Chinese market is also helping.

“Overseas buyers have dropped off because of the extra 8 per cent stamp duty they have to pay and off-the-plan is very bad,” said Black Diamondz founder and agent Monika Tu. “But the local Chinese market is still very active for existing properties.”

The agents had 10 bidders register to bid, four more than expected.

She said local Chinese are favouring CBD apartments and Morton agent James Crow is seeing plenty looking for bargains in Pyrmont. At the recent auction of a one-bedroom unit in Point St, Pyrmont, he had 10 bidders register.

“We were expecting four to six, but we had some opportunistic investors turn up unexpectedly,” Mr Crow said.

A young woman paid $925,000 for it for her mum, who was returning to live in Australia from Asia.

Investors have also been outbidding across the city, which CoreLogic commentator Kevin Brogan said was an indication that banks were “starting to loosen the purse strings”.

article from realestate.com.au