It seems that only yesterday I wrote my last market update. We are now well and truly into the spring “selling season”. There is an increased amount of property on the market but stock levels are still down on what they would normally be for this time of year. Some buyers and sellers continue to express their concerns about the uncertainly of the market however we are seeing confidence returning to the property market and the facts and figures tend to support our experiences.
We started a number of spring Auction campaigns on the weekend including apartments in Mosman and Cremorne Point through to houses in Neutral Bay and Cammeray. We had some 20 plus groups of buyers attend each of our open home inspections. We have a number of requests for contracts and have also received relatively strong offers on a number of the properties. Buyers seem to have come out of their winter hibernation.
Other positive news....
Sydney auction clearance rates over the 9 months have remained reasonably stable in the low to mid-50% and are trending upwards. Over the last two weekends Sydney’s Auction clearance rates have risen over 60% according to the Real Estate Institute of NSW.
Higher rents are driving investor demand. With the recent changes to the laws allowing SMSFs to purchase property and with the volatility of the share market many more people are using self-managed super funds to buy property – latest Tax Office figures show a 13% increase in property investment via SMSFs over the past year. Also, an increasing number of young people are choosing to buy an investment property ahead of their first home. People still want to enter the market and if they can’t afford it, they will stay at home longer, save for a larger deposit, or buy with family or friends.
Interest rates have been kept on hold for the longest period in five years with some economists even entertaining the possibility of a cut over the next few months. . The RBA’s decision marks a positive start for real estate in spring – traditionally a very busy season for residential property with the warmer weather often reinvigorating those would-be buyers who held off from making a purchase during winter.
The expectation that rates will continue to be held at 4.75 per cent for at least a little while should provide some added motivation for buyers to take advantage of generally optimistic conditions
If the RBA moves to decrease rates further, this will supersede many macro economic issues for the average buyer. Buyers have been concerned about interest rates moving upwards and we really would like to see a rate reduction that puts the steep rises of the past 18 months behind us. With three year fixed rates now below the variable, the banks’ are indicating their belief that interest rates are on the way down.
Property still remains an excellent long term investment and without a doubt it offers more stability than the volatile share market. In short, we are experiencing great buying opportunities. The long term view is to purchase quality property in blue-ribbon areas or markets that show great prospects for capital growth.
For those who would like further advice regarding the sale or purchase of property this spring, please contact me on 0414 666 190 or by email at joshua@century21mosman.com.
