Cashed-up investors fight for Sydney homes

Cashed-up property investors are fighting hard to secure good investment properties in Sydney. Source: AAP

CASHED-UP buyers are fighting hard to secure investment properties in Sydney.

Demand for high-yielding homes has pushed the harbour city's weekend auction clearance rate above 75 per cent for the second time this year.

But while such levels normally indicate boom conditions, market commentators are cautious about trumpeting the recent results.

Since Easter, Sydney's weekend auction clearance rate has risen from 69 per cent to 73 per cent and to 75.6 per cent on Saturday.

A total of 158 of 191 homes sold under the hammer at the weekend, Australian Property Monitors (APM) said.

APM economist Andrew Wilson said record low interest rates were contributing to the trend.

"There's a lot of investor activity in Sydney that's driving these strong clearance rates," Dr Wilson told AAP.

"We're starting towards auction clearance rates that are at the highest level that Sydney has recorded."

Rather than an autumn/winter slowdown, market watchers were witnessing signs of an early positive trend, he said.

While Australia's largest city recorded a similar level of property investor interest in 2010, the market was still fragmented with weak demand for properties valued at more than $2 million.

The real strength was coming from people vying for $1 million to $1.5 million residential properties as the market moved from a recovery phase into an expansion phase.

The median auction price for houses in Sydney was $826,500 on Saturday, while the median auction price for units was $706,000.

In Melbourne APM said the clearance rate of 65 per cent was down slightly on last week as the city undergoes a more widespread recovery.

Rental yields in Melbourne are about one per cent lower than Sydney, while the median house price is $626,000 and unit price is $422,000.

Dr Wilson said residential property investors were favouring Sydney, Brisbane and Perth.

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