This month we report on the first half of 2010 which has seen the local property market continue to ride the crest of strong economic confidence. Robust gains and impressive high-end sales are dotted throughout the past six months. While we noted a slight hiccup in May as interest rates marched forward, the market reignited in June as rates steadied and the supply of new listings significantly declined. In contrast to 2009 which saw the early to mid pricing tiers provide the platform for growth, this year has seen the upper pricing tiers significantly improve and drive the market forward.

 

Many buyers who were upgrading demonstrated great confidence in the top end of the market, spurred on by a better-than-expected result when selling their existing home. This year we have regularly reported that upgraders have been the standout buyers in the market. As a result there has been close to 70% more transactions of properties priced above $1.5m in the 2041 postcode compared to the same period in 2009. This upper-end property improvement has been echoed through much of the Inner West zone. We have also seen very impressive auction clearance rates with Rozelle the star performer presently sitting at 90% for 2010.

 

Our company recorded the two strongest sales in the 2041 postcode this year. Our record auction sale under the hammer for a Louisa Road property in May achieved $7.4m and most recently in June we traded a stately residence in Smith Street, Balmain for close to $5m. In fact, our final weekend of June auctions saw four local properties go under the hammer with the average sale price sitting at $1.76m. Family homes remain in hot demand, again the byproduct of buyers looking to upgrade following bullish first homebuyer activity throughout 2009. It was only a matter of time before this sector of the market improved as it was hardest hit during the global meltdown. Those who purchased a property above $1.5m in 2008 are likely to have experienced between 20% to 30% growth in the past 18 months, which is quite astounding.

   

Despite many pundits suggesting the market would soften, the past six months have remained bullish. We detected the first signs that the market may be starting to cool during May but with rates holding steady in June and a decline of quality stock typical during winter, sellers again hold the advantage. It has been a busy six-month period with 690 transactions recorded across Balmain, Rozelle, Lilyfield, Leichhardt, Annandale and Drummoyne. The rental market has also remained tight with increases recorded and very strong foot traffic at open homes. Will the next six months be as strong? We’ll continue to let you know but our sense is there is some buyer caution creeping in and if interest rates do start to rise once again, this will have an impact.