• September 5, 2018

We saw a slight improvement in market sentiment and sales results during August, however, the number of properties available and auctions conducted remained quite low, which is typical for the Winter period. The auction market was still subdued across Sydney, though during the month there were a couple of weekend results that gave sellers some hope that the market was, at the minimum, stabilising. During the month, we averaged 13 buyers at our Saturday inspections and six at our mid-week viewings, which is reasonable and certainly provides sellers with an opportunity to secure a buyer providing value can be recognised. Typically, the general buying audience remains in ‘wait and see’ mode, researching the market and assessing value and overall conditions before feeling comfortable to move in and secure a property.


We’ve heard all about the restrictive lending policies which have significantly impacted borrowing power and confidence for so many buyers. The effect of these policy changes has been more dramatic than many leading market forecasters had predicted, although perhaps we are just starting to see some stability as people readjust to the new environment and banks start to offer new products. There are some good signs for homeowners. Interest rates are likely to remain stable for another year with Macquarie Bank predicting there won’t be a rate change until 2020. This has to be a very comforting thought for any property owner or those looking to make a purchase.


Also during the month, we saw ANZ drop its interest rate for newly approved fixed and variable loans as the race to win customers started to heat up, particularly among the major lenders. Looking to eliminate many of the smaller lenders in a tightening market, it is said that there could be a mini interest rate battle between the majors, with more attractive products to entice consumers. This will be interesting to monitor but one gets the feeling that Australian Banks don’t like the shackles that have been placed on them by APRA and will be finding creative new ways to encourage home lending.


The big question asked in the market during August was ‘what will happen to conditions when a greater supply of property becomes available in Spring?’ It’s true we are dealing with fewer buyers who are legitimately in a position to purchase and potentially a higher number of properties available for a smaller pool of buyers. This could place some downward pressure on prices, however, it may also be the case that August allowed the market conditions to stabilise just enough to absorb an influx of property. Certainly, as we hit the back end of August we secured some prestige sales above $5 and $6m, which is always a good indicator for the market. Will it be enough to provide confidence for the current buyer sentiment? We will be watching closely with interest.

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