Six consecutive weeks with the Sydney auction clearance rate above 70% and a sustained period of strong performance highlighted the August market. We also saw an increasing number of properties selling above their set reserve, which was something that both the Sydney and our local market had not seen for almost two years. High quality blue chip real estate attracted close to frenzy like conditions which were last seen in 2016 and there was a degree of FOMO (fear of missing out) evident which was spurred on by the historically low level of supply. Buyers were highly active in the market, confident to make offers and competitive at most auctions, suggesting that the market during August was no longer in recovery mode but had moved into price growth mode.

As the month drew to a close we started to see listing numbers increase. This will dilute the buyer pool to a degree, however, August posted enough results for a refreshed watermark of value to be established and this will place the market in a good position for the start of Spring. In overall conditions, buyers continue to face challenges obtaining finance and many will comment on the amount of historical data banks require to assess repayment capacity. The low-interest-rate environment, however, is fuelling intrigue and loan applications are increasing. As more loans are approved, this will increase buyer numbers which will time nicely as listing levels start to increase through Spring.

While the property market appears to have found its feet and is tracking with consistency that both buyers and sellers can view with a degree of confidence, the rest of the economy is quite jittery. During August there were multiple days with significant share market falls which sparked conversations around a recession. The US trade war with China grabbed headlines and impacted our region and we also saw unemployment starting to rise, which the RBA has been watching very closely. As a result, markets have fully priced in another interest rate cut in October with another expected in February next year. RBA boss Governor Lowe has openly said that the low-interest rates will be in place for at least another five years, which for property owners is certainly good news.

For the time being though, lots of property that could not sell earlier in the year is now being absorbed. Days on market are also starting to fall and those who were sitting on the fence and not sure if they should commit to purchase are now confidently entering the market, looking to secure a home. We’re also seeing investors creep back into the market and with the volatile share market and low-interest-rate environment, it’s likely more investors will return to property this Spring. Put simply, the property market has lifted off the canvas and is now back in the fight. We’re not getting too carried away, however. We’re seeing some consistency to the performance which is great but there is still plenty going on in the economy that can impact overall sentiment and most people are keeping a close watch on all of these elements.

August’s signature performers

Posted in Uncategorized on 2nd September, 2019