MONTHLY MARKET WRAP – JUNE 2017

May was a topical month with the Federal budget delivered on May 9. This brought much speculation about potential initiatives to cool the Sydney and Melbourne housing markets and also improve housing affordability for younger Australians.

 

The Government addressed a number of items relating to the property sector. This included provision for first-home buyers to salary sacrifice into their superannuation, with these funds being held until they are ready to buy. Retirees are being encouraged to downsize and sell the family home which will allow them to make a one off non-concessional contribution of $300,000 into their super. And, perhaps we’re starting to see the slow reduction in negative gearing with limits being introduced on depreciation claims for investment properties.

Prior to the Federal budget being delivered we were already seeing signs that the frenzied market conditions that have been a hallmark of the Sydney market for the past two years were starting to soften. During April it was reported that Sydney house prices had declined by 0.1% which is a minimal amount yet it curbed 18 months of successive growth. Additionally, the Sydney auction clearance rate which had been anchored at almost 85% all year started to fluctuate and eased back towards 80%. Speaking with buyers across the market their feedback reflects the data. Most are of the opinion that some heat has come out of the market, however, they still have confidence to purchase yet feel there is less urgency to act aggressively to secure a property.

At ground level, we recorded fewer buyers attending our open home inspections during the month which was the result of the weather becoming cooler, improved listing volumes and also a slight softening in market conditions. With fewer buyers attending inspections we also saw fewer contracts being issued per property. During the peak of the market it was not uncommon to see eight to ten buyers registered to bid at auction yet during May this dropped back to three or four. Importantly, those interested parties are still moving forward with good intent which is a primary reason why property prices have remained stable. Overall, the market is more balanced between buyers and sellers which most would argue is the best type of market.

The Government and banks would prefer to see the Sydney market ease back slowly and this plan is effective, at least for this month.Buyers can hold some confidence with interest rates predicted to remain stable for an extended period. Sellers can also feel confident that there are willing buyers in the market. As always, realistic expectations on both sides of the property transaction will ensure a fruitful sales campaign.

 

This month’s signature performer’s:

 

18 Montague Street, Balmain | $3.075m

 

348 Botany Road, Beaconsfield | Sold $1.41m

 

37 Tavistock Street, Drummoyne | Sold $2.201m

 


24 Ivy Street, Canterbury | Sold $1.532m

 

Posted in General, Monthly Market Wrap, Property on 31st May, 2017