Mark McLeod 25th November 2013 As always, buyer sentiment remains heavily influenced by the combination of local area market conditions and the overall macroeconomic environment. With just a month to go until the extended holiday break, some potentially concerning reports have been surfacing from the country’s most active property market. While Sydney property prices have been rapidly rising for the past few months, leading to strong optimism for other less heated markets, an article in the Sydney Morning Herald suggested greedy vendors could derail the real estate boom. Despite record high clearance rates, agents are beginning to report an increasing number of failed auction campaigns, apparently due to overconfident sellers getting ahead of the market on price expectations. APM’s Andrew Wilson said markets can’t keep going up and up, while the most recent clearance rate was the lowest we’ve had “for a while”. A separate SMH article said around 900 Sydney auctions are expected over the coming weekend, which will be the highest number for the year. The Daily Telegraph reported there’s been a 150% increase in investor sales over the past few months in Sydney’s west. According to local agents, sellers are keen to “cash in their chips” while the market is still strong, with some predicting prices could slump as soon as early 2014. The latest finalised auction results from RP Data showed the Sydney clearance rate at 75%, Melbourne 69%, Adelaide 52% and Brisbane 37%. Volumes in other capital cities were too low to yield meaningful averages. Meanwhile, the Courier Mail reported a New York economist has said Australia’s property prices are expensive, even in comparison to the fabled sky high prices in that city. Robert Gay warned that Australia is not impervious to a price bubble, explaining that normal monetary policy here makes the country vulnerable to “hot” money from Asian investors unable to find effective vehicles in their own country. In the lead up the final Reserve Bank (RBA) meeting for the year, AAP reported the latest board minutes indicate the RBA is unlikely to make any movement in the short term. Property Observer reported that economists remain divided on the future for interest rates; NAB is still predicting another rate cut in mid-2014, while Westpac believes there will be two cuts, taking the cash rate to just 2%. But news.au reported a growing number of forecasters are predicting the next move will be upwards, saying that once the cash rate starts rising, it will rise quickly, leaving many borrowers exposed to mortgage stress. With the future as impossible to predict as always, we encourage you to carefully review all activity around your property this week in light of the current environment.
Posted on: Sun, 24 Nov 2013 22:44:34 +0000
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