Over the past six weeks in particular the property market has bounced back. The most noticeable improvement have been our Auction clearance rates which were 74% on Saturday which makes it the first month since the first quarter to record 70% plus over a four week period. The previous six week period averaged 60% whilst May it was as low as 50%. We are now only 3% under the bullish auction market of this time last year. This is great news for leveraged property owners in particular who for the most part of the year has held grave concerns about the future of their hard earned capital which is Sydney relies more so on capital growth rather than rent return.
The standout performers are Torrens titled freestanding houses and semi-detached homes. The less speculative solidly built homes in quality locations, with privacy and sunlight have been getting the most attention. Apartments have been selling, however the stock levels are high higher in comparison to houses, and buyers are spending much more time conducting in-depth due diligence before committing. The age of the building, who the developer was and whether any capital works are planned are becoming common on-the spot questions at open homes. Smaller blocks, with low rates have been almost as popular as houses.
Stock levels remain low, however the true reflection of home sellers may be higher when you count off-market listings. Every agent is holding at least one or two so it pays to pick up the phone rather than relying on internet listings. Last week my team and I had a strong result, selling 501/6 Bay Street Botany for $1,300,000, to a buyer after one of such conversations. This was a three-bedroom top-floor apartment which had been unable to sell via auction with another agency early this year.
Many more price records have actually been set this year than last year, and I put this down to buyer behaviour. The most premium houses always attract the most buyers, and in the past many purchasers were hedging their bets across a few houses at once. However, in this market I am finding the buyers have a much more relaxed approach, and are only focusing on the house that ticks all the right boxes. This has actually had a polarising effect on the results, which has resulted in some record prices but also bargain opportunities. If you are looking to upgrade, or have a house which may attract a premium read my recent article on "how to add 10% to the sale price when selling" LINK.
In the interest of providing a balanced report I will say that I remain alert as to the how the halting in overseas immigration will play out, and how this may affect prices, in particular apartments. As we have not yet seen the heavily forecast market crash that many of us were either expecting or hearing about for the most part of the year, I have begun receiving a number of selling inquiries from those who had been sitting on their hands in a state of shock. Should a rise in stock levels also coincide with form of forced selling mid next year then this would be a recipe for a market correction. Low interest rates alone cannot drive up prices, particularly when the economy is the reason for the low rates. We need to see some more tangible factors such as employment and population growth from this point if we are to see capital growth.
2020 Budget. An unprecedented budget, which was both delayed and designed mostly in response to Covid, was issued earlier this month. Australia's cash balance was forecast to be surplus $6.1 billion for 20-21, which has now been adjusted to a deficit of $213.7 billion. The great news is that almost 60% of the Australians who lost their jobs are back to work.
- High income earners will receive a permanent tax cut of $47pw
- The 19% and 32.5% tax brackets will be raised
- Businesses will be given incentive's by up to $200pw to hire young Australians
- The Jobkeeper program will be extended until 28th March 2021
- Small and medium businesses will be able to write off a full deduction of capital assets both new and used
- $17bn in infrastructure projects to create jobs ahead of schedule and accelerate the economy
Summary;
- Auction clearance rates are up to healthy levels
- Non-strata (Torrens Titled houses) are the best performing
- Stock levels are still low despite the increase in off-market listings
- New buyer behavior has resulted in record prices and bargain opportunities
- If forced selling occurs and stock levels rise at the same time, we may see a large correction
- The 2020 budget is heavily focused on tax cuts and the short-term economy
Council Sales Reports- See what's been selling including off market/ price withheld;
Please click here for a link to a property appraisal form if you need an updated appraisal on your property.
Billy Couldwell 0416 713 721