Excellent upgrading opportunities for buyers
The April property market continued to hold firm across our local area. We witnessed strong buyer attendances at open homes, increasing turnover at the top end of the market & an auction clearance rate hovering around an impressive 70%. Interestingly, during our reported period, Rozelle accounted for slightly more sales than the Balmain zone. We can’t recall this ever happening & highlights the tight selling conditions we are experiencing at the moment. At the time of writing, the Balmain area, which incorporates Balmain East & Birchgrove, has just below 65 listings on the market. With roughly one third of these properties selling each month, buyers do have some choice but we’re still 30% lower than normal. Rozelle is a different story, with 27 properties presently for sale & 22 trading hands in the past month, which suggests almost every property in the area would be attracting interest. Again the volume of property available is around 30% lower than we would typically see & this is no doubt a contributing factor to a 70% auction clearance rate.
Last month we reported an upswing in premium listings entering the market & during April we started to record a number of sales in this sector. There has been much hype around Chinese buyers flooding the market & aiming to secure premium property throughout Sydney. Many local sellers also quite often anticipate that the bulk of buyer interest at this level of the market is likely to come from the East & Lower North Shore. However, with a number of premium sales now completed, our research indicates that more than 80% of sales above $1.5m transacted this year have been secured by locals or buyers within a 5km radius of their home. This percentage grows to 90% when you move beyond $2.5m, which may come as a surprise to many but this is actually a fairly common outcome. You can never underestimate the wealth within our area & also the keen appetite for quality property expressed by locals.
One of the key points we’d like to make about the present market is that there is somewhat of a disconnection between media reports, buyers’ opinions of the market & actual activity. Firstly, most of the media have all cannons firing & advising that the market is performing above expectations, confidence is back & boom times are coming. All of our discussions with active buyers paints a different picture, with most suggesting they feel comfortable in the market but are certainly taking a very sensible approach to the buying process. Many buyers we have spoken with are moving for a strong reason, whether it be upgrading to accommodate a growing family or seeking something they simply can’t create with their existing home. We attended most auctions during April & while many properties sold, very few have attracted spirited bidding. Most auctions secured one buyer at a saleable level & two if lucky.
As we head into the cooler months of the year, we envisage present conditions will remain similar. It is typical to see less property available through winter, however, as the last several years have shown we do record excellent buyer interest & generally strong activity. There will be some very good upgrading opportunities available for buyers, so we strongly recommend keeping an eye on the market. With the improved confidence in the market right now many patient sellers who have been holding out for the past several years are now entering the market.
Market tightening but inspections strong
It’s at this time of year that we generally observe a slowing of the rental market, with fewer vacancies and fewer numbers of people attending property inspections. The market has, in fact, tightened, with vacancy rates for the Inner West dropping to 1.7% (Source: REINSW), yet numbers attending inspections of our available properties have so far remained strong. Where last year we saw a soft market throughout the winter months, indications are that in 2013 the market will remain firm through the corresponding period.
Dealing with dampness
Winter also brings associated issues with damp and mildew. There may be individual or combined causes of dampness and mildew in a home. Regardless, it is essential that property owners address reports of damp as an urgent matter in order to protect both their valuable property and the tenant’s interests. Improvements to house ventilation and drainage, repairs to failed damp courses and installation of dehumidifiers are some viable solutions. Our advice is to get specialist advice and act immediately. Failure to do so can be costly.