In the last month, we have seen continual trends supporting our view of the softening in the Sydney property market is showing signs of improvement. The number of properties going to auction has fallen to 289 from 443 in a similar period last year and remains low compared to the past year. However final Auction clearance rate was recorded at 64%, an improvement from the year preceding of 47% across the Sydney metro areas.
These trends are due to:
RBA’s decision to cut interest rates (twice) supports a rise in buyer confidence back into the market; however supply of property remain subdue due to Winter seasonality;
Buyer's funding has become difficult to obtain, as result of year long tightening of their lending criteria. This serviceability buffer imposed by APRA on the lender is now removed, so we expect a positive flow on effect to improve the lending market in the coming weeks;
The Coalition election victory, and the removal Labor’s adverse property policies of the removal of capital gains tax (CGT) and negative gearing;
Due to uncertainty in the macro environment, and depending on certain postcodes, sellers of property are not in a stressed or distressed financial position thus are not forced to sell; and
Resurgence in demand by Hong Kong/China investors and migrants into the Australian property market. However investors from Asia have dropped dramatically for new developments.
There is no property crash in sight as Sydney enters the bottom in the property cycle. Buyer demand for property is still strong in the North Shore area, with apartment values (-2.3% last 3 months) are currently falling faster than home values in Sydney (-1.9% last three months); a good opportunity to start looking.
If you’re thinking of selling, it is important to price your property prudently, and adjust expectations from both parties to the market (it has been a good 10+ years since the GFC with solid capital growth after all). The team at Everest will always work closely with buyers and sellers to ensure a successful sales process. Feel free to contact me if you are planning of selling in this market and keen to see what your property is worth.
Stayed tuned for next newsletter regarding our view on the rental market, or get in touch if you have any burning questions on the potential of your rental property.
Clara Chan | Principal | Everest Realty | 0411 228 339 | Clara.email@example.com