Wrapping up the performance of the first quarter of 2016 for the Eastern Suburbs property market, I believe the low stock levels in more established suburbs are keeping prices buoyant, whilst more evolving/fringe suburbs are still holding their value. I’ve noticed competition is still strong amongst buyers, although not quite as intense as it was in the peak of the market mid last year. Most competition is currently between owner occupiers rather than investors which is an interesting recent change in dynamic flowing on from the tightening of lending to investors late last year. The market is far stronger than the picture the media has painted, the start of this year has been solid.
Turning to the most recent economic information put out by the analysts and Dr Shane Oliver from AMP Capital recently released an interesting piece looking at whether the Australian property market is in a bubble (refer to link below). It ignores the media hype and doomsayer predictions, focusing instead on relevant economic data that is understandable to your average Australian. He is confident that we won’t see a property crash unless there is a significant shift in the economy (recession, surge in interest rates or property oversupply), but concludes that there could be a small correction in the next couple of years. Elsewhere, speculation continues as to when the RBA may next move the cash rate and what the key drivers might be.
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 this month, the Board decided to leave the cash rate unchanged at 2.0 per cent
Over the period ahead, new information should allow the Board to judge whether the improvement in labour market conditions is continuing and whether the recent financial turbulence portends weaker global and domestic demand. Continued low inflation would provide scope for easier policy, should that be appropriate to lend support to demand.’
Source: Reserve Bank of Australia
Auction results
Weekend auction results for Saturday 19 March 2016:
– Sydney: 76%
– Melbourne: 74%
– Brisbane: 46%
– Adelaide: 72%
Source: Domain.com.au
House prices
‘Very expensive housing and high household debt leave Australian housing vulnerable. However, in the absence of either a recession or much higher interest rates a property crash looks unlikely. The Sydney and Melbourne property markets are likely to slow further this year and have another cyclical 5-10% price downswing around 2017-18.’
Source: AMP Capital
Inflation
‘While the RBA is clearly focused on the labour market and global developments, recent communications – especially in the context of a number of recent global moves – highlight that inflationary expectations also need to be watched – especially if actual inflation undershoots.’’
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 24 March 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
