WBP Property Group valuers have been witness to 10 per cent -20 per cent growth in some markets, however, in recent times most markets have experienced historically low rates. If your decision is to buy during this market, buy wisely. It’s a market where compromised property can sell for an inflated price to an uneducated buyer. It may be a property on a busy road, land that is transmission affected, or an over priced new unit which in a normal market will struggle to sell. RP Data is reporting lower vendor discounting of -5.5 per cent in the August market update. Median house prices are 3.2per cent higher than RP data’s 2010 peak. That’s a long recovery period. The RBA has reduced the cash rate by 0.5per cent. Housing stock remains in short supply notwithstanding there has been some improvement. In terms of sale volumes, NSW OSSR recorded 86,213 transactions for the 12 months to June 2013, which is up 22 per cent on the preceding 12 months. May 2013 saw 17,420 transactions, I would need to go back to October 2009 to find a higher monthly volume which coincidently was the last time we experienced interest rates at current levels. That was at a time when State and Federal Government home purchase incentives were generous with attractive grants and tax exemptions for new AND second hand dwellings however they favoured new dwellings. Activity was similar to the current market in which stock was limited buyers where motivated but investors were few. Locations such as The Ponds became a focal point for aspirational buyers and young professionals and the locality hasn’t looked back. It was a honeymoon period in ways. It was a market that was probably no better or worse than now. The difference now is the buyers of existing homes are likely to be investors rather than first home buyers. The investors however are potentially unaware of the local market and are return driven as opposed to looking for a place to raise their kids in South West Sydney. The owner occupier can afford to pay $320,000 and the investor will pay $350,000 without blinking on the basis of an achievable gross 6per cent return, hence the rising market.
Posted on: Thu, 05 Sep 2013 01:50:42 +0000
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