It is understood this Spring has been the slowest since 2012. Sydney house prices has slowed to 0.3% growth in the last three months, with clearance rates hovering at 70% and below. Many are predicting doom and gloom for areas of Sydney where properties are not classified as "high demand". High demand properties includes properties that are scarce and ripe for renovations, subdivision and re-development, high-end prestige properties that are newly re-built and/or recently renovated. Furthermore lenders has executed a number of cooling measures which include raising interest rates, further tightening on their lending criteria (investor lending values have now fallen 11.3% over the last 6 months) plus a government driven market-wide reduction in new interest only loans.
With days getting warmer and longer, people's mood tend to change with greater optimism. Investors tend to come out of the wood work as property supply increases during Spring and Summer. In our opinion, we believe the sales market should improve; but with the frenzy from the last few years dissipated. We have spoken to a number of local and overseas investors and the general consensus is that they are still willing to pay above the advertised price for the right property that tick all their requirements.
We feel there may be small corrections in the market but property prices will continue to stagnate for a period of time (from a growth of 13% from the year preceding), whilst rental yield will continue to deteriorate; significantly impact those with apartments located in areas with with new supply coming online in the next 3-12 months.