We have had a great month since our last update. We’ve sold a range of properties - from an unrenovated 1-bedroom apartment for $410K in Mosman through to a family home in Cremorne Point for $4.12 million, and plenty in between. With spring on the doorstep, we are also looking forward to a number of exciting listings that we have teed-up to launch in the next few weeks.
Our recent sales have certainly benefited from the seemingly low level of quality properties on the market this winter. There have been good numbers through our open houses, and buyers are actually commenting that there is not much to choose from at the moment.
Some reported statistics back our observations - research firm SQM states that the total number of online residential property listings fell by 2% during June. This is the second month in a row that they have reported a decrease in the number of listings. Some newspaper reports have cited 25% more stock on the market than the same time last year, but based on our observations, these figures must be heavily affected by other areas in Sydney.
The low stock level is typical of the winter selling season, and this year seems no different to any other. We expect to see some more properties on the market in August, with a larger increase in September. Auction clearance rates remain stable. They have been hovering around the 55% level for quite some time.
Encouragingly, we are also seeing many more investors return to the property market, including international buyers – primarily from China, Hong Kong and Southeast Asia. There is a noticeable increase in buyer enquiry over the last few weeks following the Reserve Bank announcement that rates would remain on hold for some time. ANZ has publicly predicted interest rates to stay on hold until at least February, and Westpac chief economist Bill Evans is predicting a series of rate cuts beginning with 25 basis points in December 2011 through 2012, totaling 100 basis points prior to a period of steady rates in 2013.
Forecasting rates seems to be a new industry in of itself - predicting monthly RBA decisions has become big business. Predictions continue to dominate newspaper headlines, and every television news broadcast seems to have an “expert” sharing their opinion/prediction.
In such an interest rate-sensitive market, this can cause instability. Fortunately, most recent punts are on interest rates staying on hold for the near future.
It seems that the banks have relaxed their lending practices somewhat – whereas 3-6 months ago we had a much harder time arranging finance for our buyers, today we are having fewer issues with the banks, which is a great sign.
This appears to be mirrored in the official statistics: recently released figures show that the number of home loan approvals in May rose to the highest level seen in the last two years. Data from the Australian Bureau of Statistics showed a 4.4 per cent month-on-month rise, taking the total up to 49,437.
These lending figures could indicate that the housing market might be on the road to recovery from a sluggish first half of the year, and could account for our busy June/July. With finance newly in place, these buyers are in the market and ready to buy.
The hot topic right now of course is the Carbon Tax and what effect it will eventually have on property prices, but the more immediate impact will be on consumer confidence and retail spending. The question is, how long will it take to for the country to adapt to the changes? One half of politics is working very hard to prolong the fear until the next election. Hopefully the impact on consumer confidence will not have that much stamina.
The Westpac-Melbourne Institute Index of consumer sentiment tumbled 8.3% in July to 92.8, from 101.2 in June. These are factors that are strongly weighed by the Reserve Bank when deciding on interest rate movements, and could assist rates remaining unchanged for the rest of the year – good news for mortgage holders and the property market in general. We will have greater detail about the RBA's thinking later this week with the release of the latest board minutes - I will post these to my blog when available. We already know the conclusion: the present level of interest rates is about right.
The European debt crisis is another issue making headlines. It is just another concern people are thinking about and looks as though it will be with us for some time.
Looking beyond the current headlines and despite all of these concerns, the key fundamentals of our economy remain on track. We still believe property is a safe bet, and our clients—both buyers and sellers—agree.
If you have been considering buying or selling this year, please feel free to call us anytime to discuss your circumstances. We are here to help you achieve your property goals, and will assist you through the entire process.
Best regards,
Joshua Wygoda
0414 666 190
