Spring Market Update – September 2011

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.

Choosing the right Agent to sell your home

For most the prospect of selling a home at the moment seems to be somewhat daunting.  Never before have vendors had access to such vast amounts of information about market conditions, and while knowledge is definitely powerful, it can also be confusing.  

Add to this the continuing contradictory media speculation about the state of the market.  Some weeks it looks as though interest rates are set to go up and there is an undersupply of properties, the next the commentators may be reporting that there are affordability and supply concerns.  Buyers can definitely be excused for being perplexed! 

When hiring a real estate agent, vendors are essentially trusting the person that sells their home to provide them with the most accurate market information.  This will enable them to make an educated decision about various aspects of the sale, including the price to accept, whether to take a property to auction, and how to best negotiate on price if the auction is not successful.

 

In conditions where the market outlook is somewhat uncertain, good agents will be frank and honest with you as their client, both through the stages of securing your business and as your property is taken to the market.  

I have no doubt that when pitching for your business, less credible agents will give you overly positive information regarding price expectations and the like, that may not necessarily be reflective of the true state of affairs.  However, it could very well be what you want to hear, and thus it is tempting to believe them.  

Good agents will refrain from over-exaggerating the positive state of the market to obtain your listing.  While you may not like to hear it at the time, receiving an honest assessment about market conditions from the beginning should help to make your selling process a lot easier to handle.  

As a vendor you will also need to trust your agent to guide you through the price reduction process; that is, if your property has not yet sold, lowering its price to a level that meets buyers’ expectations.  Believe me, this won’t be an easy conversation for your agent to have with you, however a good agent will approach you respectfully and should display an understanding of your situation.  They know you don’t want to hear that your expected price may not be attainable, and will attempt to deliver the disappointing news in a truthful way.  

Working with an agent that you trust and whose professional opinion you believe, is incredibly important when selling a property.  It is an agent’s job to educate you and prepare you to be able to make the best decision for your individual circumstances – try to appoint your business to an agent who is truthful and realistic with you from the outset of your sales process.  

 

JUST LISTED - 26 BARRY ST NEUTRAL BAY

Loads of Potential

Ripe for Restoration!

Tightly held for over 90 years, ‘Brigalow’ is a stately c.1890 residence set on a level 692sqm (approx) block, just minutes walk to Neutral Bay shops, buses and local schools.

A well-loved family home steeped in Sydney’s history and ready to make new memories, its features include:

• Generously proportioned reception rooms
• 5 bedrooms plus study, including a self-contained flat
• Unrenovated kitchen
• Lock-up garage with rear lane access
• Level lawn, mature private gardens, sandstone flagged courtyard
• Soaring ceilings and preserved period features including fireplaces and large North-facing bay windows
• Only steps to Liberry Park and Neutral Bay Club amenities

Renovate or restore – the potential is tremendous. Don’t miss your opportunity to shape your own local legacy!

Inspect on Saturdays and Thursdays 12.00 to 12.45pm

Auction: Saturday 8 October 2011

For more information including additional photographs and floorplan please visit:

the Century 21 website

Please feel free to contact me on 0414 666 190 if you require any further information.

JUST LISTED - 11 ARKLAND ST CAMMERAY

 

RENOVATE OR REBUILD

Potential-Packed Freestanding Home

This charming California bungalow is brimming with potential and opportunity. Situated on a quiet street only a short walk to Cammeray shops, cafes and transport, its features include:

• Generous land size of 427sqm (approx)
•  Large rear verandah with a quiet, leafy aspect
• Sunny and private near-level back garden with lawn 
• Established flowering trees including a crepe myrtle and 2 large frangipani
• Original kitchen and bathroom
• Three spacious double bedrooms
• Charming period character, including high decorative ceilings, working fireplace, timber floors and glasswork throughout
• Picturesque street facade and front garden
• Off-street parking

In original condition, choose whether to move straight in, undertake a simple ‘facelift’ renovation, or fully capitalise on the home’s position with a rear extension and second level (subject to council approval) – the possibilities are endless!

Inspect: Saturdays 1.00-1.45pm or by appointment

Auction: Saturday 8 October 2011

For more information including additional photographs and floorplan please visit:

the Century 21 website

Please feel free to contact me on 0414 666 190 if you require any further information.

JUST LISTED - Stylish Kirribilli Apartment

15/48 UPPER PITT ST, KIRRIBILLI

It is not often that an affordable renovated security 2 bedroom apartment with views and a parking space on title becomes available in one of Sydney’s most sought after suburbs. Situated only steps from Kirribilli’s cafes, village shops and restaurants, this ultra-convenient address offers contemporary living at its finest.

FIRST OPEN THIS SATURDAY 10.00-10.45AM

For more details, please give me a call 0414 666 190

Property update - Global headlines and our local market

Much has happened since my last update both locally and globally - the downgrade of the United States’ credit rating, stock market volatility, softening of the Australian Dollar, more speculation about interest rates, as well as many other overly sensationalised headlines that the Australian media continues to churn out to sell papers. There is, however, good news for the Australian property market, read on….

Last week's rollercoaster ride on the Australian stock market and global uncertainty did not seem to have a negative impact on the weekend's house-buying activity in Sydney. The auction clearance rate was 60.5% compared with 54.3% last weekend. It seems that with share market activity volatile, many investors are questioning their strategies, adding fuel to the long-debated argument of property versus shares.

Traditionally during uncertain times, bricks and mortar are typically a haven for investors who have pulled their money out of shares in reaction to a volatile market. Property is seen by most as a far ‘safer’ environment for investors. We are also seeing more SMSF’s turning to property. According to a survey carried out by Mortgage Choice, about 6% of first-time Sydney investors plan to tap into their super funds when making their first property acquisition.

Consumer confidence also appears to be weathering the uncertainty. According to Dr Andrew Wilson, senior economist for Australian Property Monitors, there are still some doubts about the performance of local, national and international economies, but last week's stock market rally indicates there is investor confidence in the underlying strength of the Australian economy. If this confidence holds up as expected, it will have an undeniably positive effect on the housing market.

There has been a lot of speculation about interest rates in the last few weeks. In reaction to the debt problems facing the US and Europe, money markets have already factored in a cut of 1 percentage point in the official Australian cash rate by the end of the year. Westpac is forecasting a 1 percentage point rate cut by the end of 2012. And while ANZ is erring on the side of rate stability in the short-term, publicly citing a strong domestic economy, they have followed suit with the other major 4 banks last week, dropping their fixed-rate mortgage rates. ANZ's three-year fixed rate plummeted to 6.44%, ahead of CBA at 6.59%, NAB at 6.69% and Westpac 6.79%.

Other factors are also causing downward pressure on interest rates. For example, the unemployment rate has increased nationally, although importantly for us, there has been no change in employment figures for NSW. Lower interest rates typically stimulate the property market – as we saw in late 2008, when rate cuts were quickly followed by a large increase in demand for residential property.

Importantly, we are still seeing strong levels of enquiry from overseas buyers, and the softening Australian dollar is making foreign investment even more attractive. While the US and European Union are suffering at present, we have found that East and Southeast Asian buyers continue to be attracted to Australia for its economic and political stability, and with the Australian dollar dropping, property is becoming an increasingly strong investment proposition for international buyers.

While interest rates have a strong impact when buyers are making a decision to purchase, what we really need is a period of stability. There is so much uncertainty with conflicting media stories daily – we understand that it is hard to know what to expect next. At this point, both buyers and sellers should be factoring in the rate drop that the banks have made over the last week. If you are thinking of buying, keep in mind the rise in the market that followed the last set of rate cuts – if you are holding off and waiting for the market to dip further, you may find you have missed out. For sellers who have been unsure about the climate of the market this year, there is an opportunity here as local buyers return to the market on the back of lower interest rates and from overseas on the lower Australian dollar.

I would be happy to discuss your own situation and how you can take advantage of the current market to achieve your property goals.

Best regards,

Joshua Wygoda
0414 666 190
Century 21 Mosman

JUST LISTED - Stunning Near- New Luxury Family Home

18 UPPER SPIT ROAD MOSMAN

Spectacular views, uncompromising luxury and extreme privacy characterise this architectural masterpiece overlooking Middle Harbour. Situated adjacent to Parriwi Park at the end of a quiet cul-de-sac, this home commands a striking position on over 1000 square metres, with resort-style amenities and the finest in contemporary finishes.

Designed with an active family in mind, the home’s intelligent floorplan includes large formal and informal living spaces on the ground floor connected by an open plan gourmet kitchen. The bedrooms are situated on the first floor, while the lower ground floor is dedicated to a home theatre, wine cellar, sauna, pool and spa facilities, with travertine floors, underfloor heating and ducted airconditioning throughout. Completed in 2010, this is a rare opportunity to own one of Mosman’s most stunning contemporary residences.

For more details or to book an inspection, please call me - Joshua Wygoda 0414 666 190 Century 21 Mosman