• December 4, 2019

Well here we are, the closing stages of the 2019 property market, and to use the old footy analogy this year has been a game of two halves. If you purchased in the first half of the year you would be very happy with the second half-year performance given that the market has added 10-15% to the value of your new property. The speed and strength of the recovery through the back half of 2019 caught everyone by surprise and it doesn’t appear to be slowing down as we enter December. With listings coming into the annual hiatus for the Christmas break, the year is set to finish with a high number of buyers still searching for a property. This is also likely to transfer over into a solid start to the selling cycle in 2020.

Over the past month our Drummoyne office has excelled, holding the number one position in its market with strong turnover and an increasing number of off-market transactions, which now account for 35% of its recent sales. Over in our Annandale office, the team has been busy setting strong prices in Stanmore, Forest Lodge, Marrickville and of course Annandale. Our Earlwood team has been turning over property quickly with buyer demand driving average days on market to just 17 from the last 10 sales. In Balmain, in the past 30 days our team has continued to maintain an impressive auction track record with a 90% clearance rate, a range of high-end transactions, 11 off-market sales and a number of commercial sales as well. While real estate results have exponentially improved, our focus remains on helping people move through this new environment, be it by setting up their sale correctly or linking the ideal buyer with the right property.

Interestingly, CoreLogic market analysts suggest that at the current pace of monthly price growth in Sydney, the peak prices that were seen in 2017 will be surpassed by the middle of 2020. However, this is a Sydneywide prediction and we’d suggest from our internal review of local results that in many of our markets prices are already back at what was being achieved in 2017 and potentially even surpassing those price levels for the most sought-after homes. It’s important to note that the prices achieved in 2017 were considered to be the highest ever recorded in Sydney’s property history which highlights how significant this new market trend really is. Louis Christopher of SQM Research released his 2020 property forecast during the month and it noted that without any APRA intervention, Sydney property prices will increase between 8% and 14% in 2020. That may be hard to fathom given that the overall economy remains subdued yet the low interest rate environment remains a key driver of rising property values.

If anyone was ever in doubt about the power of market sentiment in real estate, we need look no further than the 2019 property cycle. A subdued market outlook kick-started the year which resulted in weak sales results and an overall lack of interest in the property market. Sentiment flipped following the Federal election and it hasn’t slowed down since, with this positive stance providing buyers with reassurance as they look across the market landscape and see others buying with confidence. Is it strength in numbers, is it the fear of missing out in a rising market or is it a combination of all factors? Whatever the reasoning, we tend to see the sentiment pendulum swing a little too far into the extreme in every cycle. Whether we are there yet in this market cycle is up for debate but all the data suggests that there is still some price growth to come before we see another market shift. Making hay while the sun shines would be a wise move.

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