Following the May interest rate increase (no change in June) we saw the last nine months of bullish market activity move from growth to stabilisation. R&W has continued to record some strong sales over the past month (in particular a new Street record for 17 Yatama Street & a strong result at 17 Sandy Bay Road)  – however the aggression that buyers had displayed so far this year has recently returned to more normal levels & buyers are becoming a little more cautious.

Looking at the most recently released economic data – particularly figures on auction clearance rates, home loan approvals show that a change in the market began in April however there was no real noticeable effect on our area until May. As active buyers will have picked up, attendance to open homes has dropped in recent weeks over the general market place, however we are still enjoying a strong response to the apartment market.

Taking a peak at Sydney wide figures, in the last year, Sydney house prices have grown at three times the historical annual average. Sale figures achieved in 2010 have been as strong as we have seen since the peaks of the market in 2003 & 2007. Current price levels seem to be stabilising rather than racing forward as they have been. We are likely to see a trend come back into the market of buyers upgrading, rather than renovating in our local area and with a currently limited supply of property this will ensure values & demand remains positive.

Indications from the Reserve Bank are suggesting that interest rates are likely to remain on hold for some time. Some economist’s suggesting that the next movement we may see is a slight decrease while we move through the uncertainty in Europe and the repercussions of the reaction to Rudd’s super profits tax.

From a local vendor or purchasers’ point of view – what remains more important is that you achieve the right property move for you. Those that purposely try to time their transactions tend to fail. By acting at the same time you benefit from the relativity of the market & by waiting for prices to change up or down is likely to cost you the opportunity of securing your perfect home!

We look forward to seeing you at our opens and auction this weekend! Click Here for our inspection times.

Best Wishes,

The Team at Richardson & Wrench Seaforth Balgowlah.

To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*

*Sales are as reported by Australian Property monitors on 4/06/2010

We have a general consensus, as discussed in previous editions of “Real News”, that NSW is thousands of homes under supply & the current demand is forcing prices up. While one article in yesterday’s Daily Telegraph suggests that  new housing builders are doing it tough – “Taxes shut door on new housing” – with Monarch homes losing $20,000 per home built & sold in 2009. Last weekends Financial Review’s feature article was back to “What’s Driving Property Prices” and talking about how bullish prices are.

What is going on?

RP Data’s Tim Lawless (National Research Director) felt the need to state that “We are not in a housing bubble”. Mr Lawless reveals that a housing ‘bubble’ suggests housing values increased too rapidly and are set to experience a rapid decline, a fate not likely to come to be experienced in Australia. “Across Australia’s capital cities, home values have increased by just 6.2 percent per annum over the last five years – a rate of growth that is in line with wages growth which has been 6.0 per cent per annum over the same time frame” An interesting point!

The Financial Review Easter weekend edition, explored the buoyant market being experienced throughout Australia (with auction clearance rates remaining above 70%) and delved into some of the forces driving the market.

Further on this topic – Rod Cornish of Macquarie Capital Advisers, points out that although first-home buyer numbers have been in decline since they peaked at 30 per cent of the market in May last year, the market has been driven for the past six months or more by repeat buyers or upgraders.

Real Estate Institute of Australia President David Airey, backs this up stating that upgraders now account for almost 60 percent of the market and many have sold their previous home to first-home buyers

Building on the demand side of the equation, Richardson & Wrench Seaforth/Balgowlah (R&W) have however, been experiencing an increase in foreigners securing property as the Foreign Investment Review Board relaxed purchasing requirements last March – with a number of buyers flying in for a week to 10 days to secure a home on their trip.

Reviewing the market, selling conditions remain buoyant and our feeling is that the market has moved past the uncertainty of the GFC & has now found steady ground.

In this market, particularly for prestige homes – vendors need to be accurate with their anticipated price to achieve a sale in a favorable timeframe. Purchasers will also need to act or you are likely to miss out with someone else moving in ahead of you.
 
Cutting through all the information – What’s our advice?

If you like a property, you can afford it and are planning for the longer term – jump in now and secure it. We enjoy a fantastic lifestyle on the gateway to the Northern Beaches – its time for you to spend your time enjoying it in your “castle”!

 
We look forward to your posts on the blog with any additional thoughts & comments from our readers.

Please feel free to email us if you have any further questions about the market or real estate in general – it would be great to hear from you.

Till we meet again, wishing you all the best in your property search!

The Team at R&W Seaforth/Balgowlah.

.

See you at the open for inspections: Click Here for our open times

To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*

*Sales are as reported by Australian Property monitors on 9/04/2010

Looking through the long weekend with the economic data at hand it would appear a safe bet that interest rates will continue the upward trend next Tuesday with the markets pricing a better then 60% chance of an increase.

The rate increase curve may be levelling out as we move back to the neutral cash rate. Last week Assistant Governor of the Reserve Bank of Australia (RBA), Philip Lowe has stated that the underlying inflation has “moderated significantly” and is expected to decline from 3.25 per cent to about 2.5 per cent during 2010.

Dr Lowe has reinforced that the central bank’s view that the Australian economy had “relatively limited spare capacity” and that it was likely interest rates would move towards “more normal” levels.

Depending on who you listen to we may be looking at another 3 interest rate increases over 2010 (up a total of 75 basis points) if you take the Commonwealth Bank (CBA) suggestion then the rate increases could be a more aggressive with 5 increases up a total of 125 basis points.

RBA Governor Glen Stevens, stated this week that house prices are “getting quite high” and suggested that interest rates may need to be increased further to contain inflation.

On the coal face we have seen buyers factoring in interest rates, returning to historical levels since the economy started to turn around last year. So the strong demand we feel will continue as interest rates increase as there should be no surprises as to what is happening.

We feel that if the variable interest rates move above 7.5% then we will see interest rates having an impact and providing downward pressure on the local housing market. In the past we have seen other parts of Sydney show signs of housing slowing before there is any noticeable impact on the Northern Beaches. Looking across Sydney we are not seeing signs of the market cooling off with auction clearance rates sitting around 70%, the market is looking quite solid.

First & foremost – Happy Easter from the team at Richardson & Wrench Seaforth (R&W)

As shown in the above diagram while auction clearance rates sit substantially over 50% then the market should continue to move strongly.

Over the past month we have seen an increase in the number of homes selling within the first week on the market, selling off our database previews before moving to a more aggressive marketing campaign. Talking to a number of buyers this week the frustration has been building as our database keeps growing at a much faster rate than properties are selling. With a number of new listings hitting the market after Easter we hope to be able to satisfy some of the current demand.

We look forward to your posts on the blog with any additional thoughts & comments from our readers.

Please feel free to email us if you have any further questions about the market or real estate in general – it would be great to hear from you.

Till we meet again, wishing you all the best in your property search!

The Team at R&W Seaforth/Balgowlah.

.

See you at the open for inspections: Click Here for our open times

To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*

*Sales are as reported by Australian Property monitors on 1/04/2010