Sydney real estate lifts NSW to clear No. 1

Real Estate

NSW economy a clear No. 1
The Sydney property market continues to reach new heights with the auction clearance rate setting a new record of 88.2 per cent over the weekend. Foreign buyers are a big part of the growth story for Sydney accounting for more that 21 per cent of demand in NSW compared to 15 per cent across the entire nation. The $500k to $1 million price range attracts around 40 per cent of its sales from foreign investment. Meanwhile house price growth nationwide is showing signs of slowing despite Sydney prices charging ever higher. 
Real Estate figures
The latest figures from the Commonwealth Banks State of the States reports show that the strong housing market in Sydney has helped increase NSW’s hold as the No.1 economy in the land ahead of the Northern Territory and Western Australia. New South Wales looks to be well supported by home construction and infrastructure spending over the remainder of the year. 
The Housing Industry Association has called for stamp duty on residential property conveyance to be abolished as a key reform for housing affordability. The voice of the industry says that restricting access to negative gearing would reduce investment in housing and place upward pressure on rental pricing. It says new housing is one of the most highly taxes sectors of the economy, negative gearing promotes investment and any discounting of the tax break is a retrograde step for tax reform. 
And the latest HIA-CoreLogic RP Data Residential Land Report is showing that a lack of land supply is hampering the housing recovery across the country. Residential land sales fell by 12 per cent over the 12 months to the end of December 2014. Meanwhile, median land prices increased by 6.3 per cent, driven primarily by increases in Sydney, Melbourne and Perth. 

FNN spoke to Harley Dale Chief Economist at HIA about what the latest figures mean for real estate buyers.  
‘The latest information on residential land sales shows a considerable drop in the volume of residential land that’s being sold. At the same time as the increase in the price of residential land has accelerated to a pace of around 7 per cent which is the highest in around 3 years. So that constrained supply of residential land is putting upward pressure on land prices and we think probably pricing some people out of the market.’ 
Australian auction results
Looking at this week’s auction results across Australian capital cities - Sydney recorded a record 88 per cent clearance rate from 737 properties for auction, Melbourne cleared 82 per cent from 1091 properties, Brisbane had a 48 per cent clearance rate from 109 properties listed and Adelaide cleared 60 per cent from 59 listed auctions. 
Commercial property sector
Property developer Finbar Group Limited (ASX:FRI) will pay $5.95 million for the Port Hedland Hospital site and develop residential apartments with an estimated end value of $390 million.
Mirvac Group (ASX:MGR) says it has sold all but three of the 224 apartments in the tallest tower of the Green Square Town Centre on the weekend. 
Villa World Limited (ASX:VLW) will pay $16.5 million for a development site in Brisbane’s Bayside region to be known as Seascape. 
And Dexus Property Group (ASX:DXS) has raised $400 million in an institutional placement toward the purchase of a $630 million office and retail complex in Brisbane knows as Waterfront Place.