As we move towards the end of February (already!) the market is well and truly back in full swing, and I am starting to get a feel for how things are shaping up for the year. Whilst latest statistics show that national house price growth is slowing; I have been pleasantly surprised by the level of buyer activity I am seeing locally. This was supported this weekend by a 77% auction clearance rate in Sydney, which is stronger than we were seeing at the end of 2015. As such, I am feeling confident that we will continue seeing a strong market for the time being. Of course, there are many external factors that can impact this such as Labour’s proposal to cut back negative gearing tax breaks which, if implemented, would further disincentivise investors. Whilst I don’t expect this to materialise anytime soon; it is interesting to see what is being tabled as government assesses possible tax reforms.
Turning to the most recent economic information put out by the analysts and the main focus globally appears to be on oil prices and continued volatility in equity markets, with mixed opinions on where these are going from here. The US presidential campaign also kicked off in my home state of Iowa and is progressing, which is likely to dominate news for the next few months. Whilst short-term this is too far removed from Sydney property to have a significant impact on price; given the candidates, I’ll be interested to see what the longer term ramifications might be! Locally, a mixed labour market report didn’t give analysts much direction although further jobs growth is expected in 2016 which is obviously a positive for the economy.
Below is the key economic commentary that caught my eye that may be of interest to those looking at transacting property in the near future:
NEWS
RBA cash rate decision
‘At its meeting today, the Board decided to leave the cash rate unchanged at 2.0 per cent.
Credit growth to households continues at a moderate pace, albeit with a changed composition between investors and owner-occupiers. The pace of growth in dwelling prices has moderated in Melbourne and Sydney over recent months and has remained mostly subdued in other cities.’
Source: Reserve Bank of Australia
Auction results
Weekend auction results for Saturday 27 February 2016:
– Sydney: 77%
– Melbourne: 75%
– Brisbane: 55%
– Adelaide: 68%
Source: Domain.com.au
Australian economic developments
This week the labour market looked less steady, after improving through much of 2015. The latest ABS estimates showed the headline unemployment rate increasing to 6.0% in January, from 5.8% in December. The less volatile trend data show the unemployment rate fell to 5.8%. Job ads data continued to improve in January, which bodes well for further jobs growth in 2016.
Source: AI Group
Capital city dwelling prices
‘Australian capital city dwelling prices, as measured by the CoreLogic RPData Hedonic Home Value Index, rose 0.9% in January and are down 0.6% over the past three months.
Melbourne reversed some of the prior weakness to record a rise of 2.5%, while price rises in Sydney were more modest at +0.5%.’
Source: National Australia Bank
Housing trends for the Eastern Suburbs:
Here are some recent sales reports for a selection of suburbs below:
If you would like a suburb report more specific to your property type or for a suburb not listed, please don’t hesitate to contact me.
This market update contains general information only as of 29 February 2016. Before making any decision or taking any action that may affect your finances, you should consult a qualified professional adviser. Kiki Bermudez or Mint360property shall not be responsible for any loss whatsoever sustained by any person who relies on this market snapshot. To unsubscribeclick here
