November Market Report An explanation of Sydney Real Estate market conditions

The Sydney Real Estate Market has reached record highs, both in terms of clearance rates, which have regularly eclipsed 80% in recent times, and the prices that have been achieved for vendors who have recently made the decision to sell. Capital growth since early 2012 is up, to the tune of approximately 50%, in key areas in the Eastern and South Eastern suburbs and through to the Inner West. This speaks to the tenacity of current conditions as we approach the end of the year, even despite a perceived recent shortage in stock. 

With six weeks remaining until Christmas, there is still a great opportunity for potential sellers to capitalize on these perfect market conditions. Buyer demand clearly outstrips supply and this is consistently driving property values above vendor expectations. With the market straining to accommodate first homebuyers, investors and retirees all looking for listings, the leverage remains with the asset holders.

Keeping buyer demand fairly buoyant, the RBA have held the official Cash Rate at a historically low 1.50%, and it is likely that they’ll keep them on hold until February 2017. This continues to make financing accessible, which is especially relevant for those seeking an entry point into such a hot market. In the longer term, it can be reasonably expected that the rates will eventually, incrementally, return to normal levels in excess of 2%.

Affecting these market conditions are considerable levels of interest and speculation from our stock markets regarding the upcoming US election. There is no doubt that the markets are concerned about any significant policy changes from the world’s largest economy, and the potential risk of a Trump led us government will prospectively put world stock markets into uncharted territory. 

Some people may ask what the US election result, and stock values, have to do with Real Estate in Australia. This industry is primarily driven by confidence, employment conditions, and peoples ability to borrow money at a fair and equitable rate. If global trade winds change dramatically, this ripples through all major asset acquisition. So it will be prudent to keep in touch with the race as it draws to a close.

N G Farah has sold a record amount of property in 2016, with some listings selling as high as $1,000,000 over reserve. Areas such as Kingsford, Rosebery, Mascot, Pagewood, Maroubra, Coogee, Randwick and Little Bay continue to be the best performers. The average price for a Sydney dwelling has now exceeded the million-dollar mark and it has become officially the most expensive capital city in the southern hemisphere. Call us today for an obligation free appraisal of your property.