Teamrw Seaforth / Balgowlah

With a barrage of articles & contradictory information on the real estate market, economy and interest rates this week, it’s tough to get a feel of what is actually happening out there!

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.

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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

9.04.10

Tags: Auction, auction clearance rates, Australian Property monitors, Balgowlah, Balgowlah Heights, Balgowlah Heights real estate, Balgowlah real estate, Clontarf, Clontarf real estate, Financial Review, Foreign Investment Review Board, GFC, interest rates, Monarch homes, North Balgowlah, North Balgowlah real estate, Northern Beaches, R&W, Real News, Richardson & Wrench Seaforth, RP Data, Seaforth, Seaforth real estate, Telegraph Taxes shut door on new housing, Tim Lawless, What’s Driving Property Prices  •  

Posted in Real News

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

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

1.04.10

Tags: Auction, auction clearance rates, Australian economy, Australian Property monitors, Balgowlah, Balgowlah Heights, Balgowlah Heights real estate, Balgowlah real estate, CBA, central bank, Clontarf, Clontarf real estate, Glen Stevens, Governor Glen Stevens, Happy Easter, inflation, interest rates, local housing market, neutral cash rate, North Balgowlah, North Balgowlah real estate, Northern Beaches, Philip Lowe, property search, R&W, R&W Seaforth/Balgowlah, RBA, Reserve Bank of Australia, Richardson & Wrench, Richardson & Wrench Seaforth, Seaforth, Seaforth real estate, Sydney, underlying inflation, Variable interest rates  •  

Posted in Real News

Figures from the Australian Bureau of Statistics (ABS) show that Australia’s population growth is double the global average - in September 2009 the population moved through 22 million.

How is population growth trend over Australia set to have an effect on the cost of housing on the Northern Beaches?

Simply, as demand is increasing Australia wide there is a flow on effect to each & every corner. Price levels in the Seaforth / Balgowlah area does preclude a large portion of the Australian market. However, there are still a number of buyers moving to the Northern Beaches to take advantage of the tremendous lifestyle that the Beaches provide.

There is a trend of many “kids” leaving home & the area due to price when they choose to buy, however they are quickly replaced with more & more “established families” moving back into the area.

Looking at the results on the ground, after four interest rate increases in the past six months and with a couple more possibly on the horizon, buyer demand is not showing any signs of slowing down.

RP Data’s national research director, Tim Lawless, has stated that current indicators suggest house prices will continue to rise thanks to increasing buyer demand.

“The RP Data – Rismark Hedonic Home Value Index was up 1.8 per cent in January this year, clearance rates are over 70 per cent, new property listings are being absorbed very quickly and rental markets are showing some improvement after a soft second half of 2009,” Mr Lawless said.

“With population growth and thus demand for housing remaining strong, the new housing sector should see ongoing improvements. Dwelling approvals for detached housing have been trending upwards, albeit from a very low base, which is a positive sign that confidence is returning to the building industry.”

There are no surprises here, it’s easily backed up by attending a local open for inspection & you can’t seem to miss the strong attendance.

Linked to the current supply & demand issue, Australian dwelling starts in 2009 were at 13-year lows. Over 2009 work started on 138,450 dwellings across Australia – the lowest calendar year result in 13 years (122,205 starts in 1996).
• In the December quarter, Australian dwelling starts rose by 15.3 per cent – marking the biggest quarterly increase in eight years. Housing starts rose by 13.4 per cent while apartment starts increased by 18.9 per cent.
Source Savanth Sebastian, Economist, CommSec

Although we are seeing strong activity on all levels of property, the fundamental basis for the market strength at different points seem to differ.

The strongest market currently is certainly entry level homes which provide the opportunity to add value. The underlying fundamentals behind this are there are simply more buyers that can afford an entry level home and as such there are more buyers to compete who are also prepared to fight to get the home that has captured their attention.

For the properties high $1 millions – early $2 millions there has been very low stock levels over the past 12 months & as such there are a large number of buyers accruing who are waiting for the right home to come available – with frustration levels rising. As such when these homes do come to the market they are being snapped up quickly.

Prestige properties as we have reported in recent posts have been enjoying the strongest market conditions in the past 2 years.

Confidence is key in this segment with the stock market returning to just under 5000 on the All Ordinaries, the devastation to prospective buyers wealth is no-longer occurring & therefore no longer generating the in-activity that we experienced last year. When priced in line with the market prestige properties are moving quickly, however if over priced homes are sitting on the market for some time.

Last week the Australian published a very interesting graph that identifies how well our top – end markets are progressing following the GFC Wealthy buyers push prestige prices up. Looking back at the prestige market over the past 3 years, below, it will be interesting to see how this quarter closes & exactly how we move from here, however the indicators & market sentiment suggest that we will be moving back above the 2008 levels & prices in the not too distant future.

With a few more properties coming to the market this week it should provide buyers with some additional supply that they are keenly looking for and with demand continuing provide low days on market there should be a number of happy sellers over the coming week.

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 26/03/2010

26.03.10

Tags: ABS, Australian Bureau of Statistics, Australian market, Australian Property monitors, Australia’s population, Balgowlah, Balgowlah Heights, Balgowlah Heights real estate, Balgowlah real estate, Clontarf, Clontarf real estate, housing, North Balgowlah, North Balgowlah real estate, Northern Beaches, population, population growth, Property, RP Data, Seaforth, Seaforth real estate  •  

Posted in Real News

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With Thirty-Three (33) auctions on the Northern Beaches last weekend, R&W’s Glen Wirth was privileged to be the auctioneer at Four of the Auctions [with 4 sales]. We are seeing that confidence in the market has built upon the momentum that started in November last year is still heading in the same positive direction, certainly a strong turn around from what we were experiencing 9 months ago!

While the Reserve Bank increased rates again on Tuesday this week and with expectations of another rise over the next couple months, interest rates are still below the Reserves’ economic “neutral“ position! Viewing the weekend’s results - buyer confidence seems to be moving with interest rates rather than having its usual inverse relationship. Put simply, although interest rates are going back up to their historical average, the market in our area is likely to keep powering on – with no sign of buyer interest coming off the boil.

Many cashed up buyers on our database would like to see more homes coming to the market, for those considering selling, now is definitely the time to come & have a confidential chat about the market with the team at R&W.

For those who have been out at the opens & attending recent auctions, it doesn’t take long to notice that there are many buyers out there searching for a new home (22 registered bidders for 16 New Street East, Balgowlah) and with a relatively low level of new listings - the demand trend is likely to keep on its current path for the foreseeable future.

The prestige market as we commented on 2 weeks ago is continuing to build momentum, for those looking to upgrade there are still great opportunities to take advantage of the greater market activity at the lower price brackets & comparatively less competition at the top end. 

With today’s topic of the Trend is up…, it is prudent to look at why we are experiencing this trend. This week the 6th Annual Demographia International Housing Affordability Survey: 2010 has been released. A worthwile read for those with a bit of time on their hands!

Looking at the trends from a Global, National and local view the reasons are similar, however at the local level there are some subtle differences.

Over all – supply & demand are very much the key to strong prices being paid for property. Looking at the below diagram we see that in Sydney particularly, the number of new properties being built had been falling substantially over the past few years. With the current Australian immagration policy - demand for housing is continuing to grow substantially faster than the supply.

In our local area there is only a very limited number of blocks that have come to the market in the past decade & there is a very limited supply that can come to the market in the years to come, so for our area the new builds are replacing existing homes rather than adding to the housing supply.

With the lifestyle that the Beach side / Harbour side location of our area offers, we are going to continue to find that out of area buyers are drawn to our gorgeous pocket of Sydney and as such we will continue to see increasing demand without the opportunity of any significant additional supply.

 It’s not a bad lifestyle with Manly Beach on your door step!

Continuing our review of our local suburbs sales statistics

Today we delve into North Balgowlah and see what’s been happening over the past few years.
 

North Balgowlah sales so far in 2010* (House / Townhouse / Semi)

Total number listed                          6

Total number of sales recorded  1

Private Treaty   1 Properties        $980,000 (Total Value)

North Balgowlah Sales in 2009* (House / Townhouse / Semi)

Total number listed                          60

Total number of sales recorded   42

Total Value Sold                                $ 38,257,335

Public Auction   12 Properties    $ 8,905,000 (Total Value)

Public Auction Average                 $890,500   

Private Treaty   30 Properties     $29,352,335 (Total Value)

Private Treaty  Average                 $1,012,149 

Median Price                                       $879,000 

Average Price                                     $980,957   

Highest Sale                                         $1,785,500 (R&W)  
 

North Balgowlah Sales in 2008* (House / Townhouse / Semi)

Total number listed                          67

Total number of sales recorded  53

Total Value Sold                                $52,568,750

Public Auction   16 Properties     $16,942,250 (Total Value)

Public Auction Average                 $1,058,890   

Private Treaty   37 Properties     $35,626,500 (Total Value)

Private Treaty  Average                 $962,878  

Median Price                                       $955,000 

Average Price                                     $991,863   

Highest Sale                                         $1,805,000 

North Balgowlah Sales in 2007* (House / Townhouse / Semi)

Total number listed                          61

Total number of sales recorded   58

Total Value Sold                                 $57,294,893

Public Auction   17 Properties    $18,406,000 (Total Value)

Public Auction Average                 $1,082,705   

Private Treaty   40 Properties     $38,888,893 (Total Value)

Private Treaty  Average                 $948,509  

Median Price                                       $900,000 

Average Price                                     $987,842   

Highest Sale                                         $1,750,000 (R&W) 

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 www.teamrw.com.au/buy/opentimes-sales/

 
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 www.teamrw.com.au/buy/local-market-watch/*

*Sales are as reported by Australian Property monitors on 05/03/2010

5.03.10

Tags: 16 New Street East, 6th Annual Demographia International Housing Affordability Survey: 2010, auctioneer, Auctions, Australian Property monitors, Balgowlah, Balgowlah Heights, Balgowlah Heights real estate, Balgowlah real estate, Clontarf, Clontarf real estate, Glen Wirth, interest rates, North Balgowlah, North Balgowlah real estate, Northern Beaches, R&W, Reserve Bank, Seaforth, Seaforth real estate  •  

Posted in Real News