CENTURY 21 RESNEKOV REALTY OFFICE PROFILE

RBA PREDICTS INCREASES IN DWELLING INVESTMENT

The Reserve Bank of Australia’s head of economic analysis, Jonathan Kearns, recently gave a speech entitled ‘The Outlook for Dwelling Investment’ that provided some interesting insights into the future of Australia’s residential property market. In particular, he forecasted that ongoing demand for new housing will drive increasing dwelling investment over the coming years.

According to Mr Kearns, low vacancy rates in Australia’s rental markets are a telling indicator of the significant demand that already exists for new dwellings:

“Tightness in the rental market will generally be indicative of tightness in the overall property market. While the typical owner-occupier property will differ in many ways, there is significant interconnection between the markets for owner-occupier and rental properties,” he said.

Commenting on why these market factors have not been reflected in construction rates, Mr Kearns said that ”while the number of dwellings constructed each year hasn’t grown, the size, quality and relative cost of each dwelling has.”

Furthermore, Mr Kearns noted that developers’ exposure to risk has increased in recent times, off the back of increasing regulation and greater involvement with community infrastructure provision – an area that had traditionally resided with various levels of government

Mr Kearns concluded that dwelling investment would likely increase at a relatively moderate rate in the medium-term, supported by demands for new housing:

“So what is the outlook for dwelling investment? While the long-run decline in the average number of people per household seems to have tapered off at least partly for demographic reasons, the strong population growth in recent years and the relatively low rate of dwelling construction suggest that there is sufficient demand for housing in the economy that an increase in supply could easily be absorbed.

“Overall, it looks likely that dwelling investment will pick up at a relatively moderate rate in the medium term. How quickly and how strongly of course remain important questions for understanding the impact on the overall economy.”

41 VISTA ST GREENWICH

MARKET UPDATE

It’s been a while since my last market update so now that I have finally put pen to paper I am glad there are some positive aspects of the property market to write about.

House prices look as if they are stabilising and heading in right direction, Interest rates are at low levels and look as though they may even go lower, Auction clearance rates have improved, unemployment is low by world standards and the weather is also looking great.

Here are some of the key numbers (Source: RP Data):

• National property prices are up 1.4% for the month of September. This is the 4^th consecutive month on month increase in prices and the largest capital gain since March 2010.

• National property prices are up 0.8% since the beginning of the year and it is no surprise that it has come after the RBA has cut rates by 0.75%.

• Interest rates are almost at record low levels. The recent rate cut means the official cash rate is at 3.25% which is only 0.25% higher than GFC levels.

• Average days on market has dropped from 62 days to 58 days over the past 12 months.

• Price discounting has also dropped to 6.7% compared to 7.5% for the same time last year.

• Auction clearance rates for the past 4 or 5 weeks have been consistently over 60% which is a notable improvement on last year where clearance rates struggled to reach 50%.

• Stock levels are still on the low side and there are currently 16% fewer properties on the market compared at the moment compared to the same period last year.

• It seems that the Sydney market bottomed out in May this year after falling 5% since November 2010.

• Sydney property prices have increased by 1.5% in September.

• Over the past 12 months Sydney prices are up 0.9%. This is the first rise since June 2011.

So what does the future hold?

The simple truth is I really don’t know. Based on the numbers and my experience I feel that we have passed the worst and are entering a period of stability. Hopefully a period of stability with lower interest rates, solid Auction clearance rates should eventually lead to the market returning to a period of growth.

I am extremely keen to hear what everyone else thinks so feel free to email me with your thoughts and predictions.

Finally, as everyone is no doubt aware the end of the year is fast approaching and anyone wanting to sell before the end of the year doesn't have much time left to get their property on the market. If you are in fact thinking of selling please contact me to discuss your options.

EARLY SPRING MARKET UPDATE

SPRING SERIES - SELLING IN SPRING # 6 (FINAL)

SPRING SELLING SEASON

Buyers and vendors prepare for the start of the spring selling season…

It seems that the spring selling season is well and truly underway. 

Sydney’s Auction clearance rates for the last 2 weeks have been over 60% with clearance rate for last weekend being 63.9%, the highest it has been for many months.

Is this a sign of growing momentum in the Sydney Housing Market? Here’s what the experts had to say:

Dr Shane Oliver, chief economist with AMP Capital said that after 2 tough years he is tipping a market recovery during spring 2012

“life should be a bit better for sellers, but buyers should expect a bit more competition”

Andrew Wilson, senior economist with Australian Property Monitors says the market was “in the best overall shape for years” Sydney’s median house price has jumped 1.4% in the last 6 months.

Dr Wilson also expects the prestige market to “tick upwards” over the spring.

We had our first Spring Auction on last Saturday for an apartment in Raglan St Mosman. The Auction was attended by 35 people with 5 registered bidders and a strong auction selling well in excess of the reserve price.

Channel 10 News were also at the Auction….see the video below which was aired on the 5pm news on Saturday evening.

If you have been thinking of selling but waiting for some good news, now is the time to get your home on the market.