Lending is Tougher

The first stage of the banking Royal Commission has been completed and it is expected that the regulators will come down heavily on the banks for malpractice and in-lending.

The Real Estate market has now adjusted to a new level after peaking in June 2017. For the last 15 months, property prices have come off by 10 - 15%, auction clearance rates have come down to around 50% and the volume of properties on the market have increased substantially - meaning it is taking much longer to sell a property than it did 18 months ago.

Glenn Farah, Marketing Director and Partner of NGFarah says that “although most Real Estate analysts have been predicting that prices will continue to fall - we believe that in the South Eastern Region of Sydney, quality properties are still in high demand.

“Over the past couple of months, NGFarah have continued to achieve great sales for certain types of property. In August this year we sold a commercial property at 476 Anzac Parade, Kingsford for $3,900,000 prior to auction - $900,000 higher than the vendor’s expectation.

“In the same month we sold a block of four flats in St Lukes Street, Coogee for $4,200,000 which had only just been purchased in late 2014 for $2,700,000.

“Last Saturday (29th September 2018), NGFarah sold a one bedroom unit in Pitt Street, Randwick, with no parking, for $690,000 – selling $45,000 over the reserve price.

“This proves that properties are still selling well, as long as vendor’s expectations are realistic. There is no doubt that there is a much smaller buyer pool as the banks have tightened up their lending on residential and commercial loans.”

In a tougher market, property sales are still steady as buyers are still limited with their choice. In some areas, there is an oversupply of apartments which is definitely is vulnerable to high price shifts.

Glenn goes onto to say that “most people with home loans now are hoping that the banks will not increase their rates unless the reserve bank does so itself. Any increase on interest rates will have an effect on confidence but in saying that interest rates are still at their lowest level in 60 years.”