At the end of December 2015 I wrote a post on my 3 predictions for the market in 2016. As we approach the halfway mark of 2016, I wanted to revisit this and take stock of where we’re at:
- The bubble won’t burst, there will be growth: we got this one spot on. In fact, according the CoreLogic RP Data Sydney saw 4.5% growth on the median house price January-April.
- International and local demand will remain high: Tightening in legislation in China on restricting capital outflows, coupled with lending changes by our major banks, means international demand has slowed marginally with residential homes. The impact has been even more significant to off the plan units with foreign investment slowing. The fact however, is that there’s still strength there…for now.
- Buyer demand is still strong for the right property: this is very much true. The issue is supply.
It is this supply issue that all prospective sellers should take notice of. This at the core of why I think that right now is a great time to list a property. Flowers in your garden won’t drive a high price: demand, supply and market forces will dictate the result.
There’s still good growth
Market conditions still favour the seller. While I’ve got plenty of buyers interested in property, the lack of supply means that for those vendors with a very attractive property to sell, the competition amongst buyers is very strong. 4.5% might be the median but the north shore is an above average market. Auction clearance rates are still higher on the north shore than the rest of the market (80-90% per month YTD according to CoreLogic RP Data).
AMP’s market analysis by Shane Oliver is worth reading: “In the absence of a Reserve Bank interest rate hike, or a lurch into recession in the Australian economy, it’s hard to see a sharp fall in prices coming”. None of that is going to happen in the foreseeable future, the market will remain in growth.
International buyers will remain…for now
There’s no doubt that legislation changes in China and the banks decision here, around lending to foreign nationals, has dampened some of the enthusiasm from 2015. However in the short term, demand from international buyers, particularly on the upper north shore, remains strong. We’ve also seen some of that international slack offset by the continuing strength of the interstate and returning expat markets. Now is the perfect time to take advantage of that.
Winter is the perfect season for the right property
Our buyers haven’t disappeared just because the colder months have arrived. They will pay for the right property. When weighing the pro’s and con’s of selling in winter, for me there’s some real positives.
Remember my point around lack of supply? That works heavily in your favour in winter. Also many north shore properties can present even better in the winter than they do in spring/summer, a real positive compared to other Sydney geographies. Plus, if you list now you’ll be in the market for your new property in the spring, exactly when the market supply grows and prices will come under pressure.
July/August is a sweet spot – La Dolce Vita!
We go to the polls for the Federal election on July 2. The clear air after the election is the perfect time to have your property front and centre in the market. My advice: talk to us now. Make the most of winter and take advantage of the best market conditions before they disappear!