Market update November 2016 – Kiki Bermudez

Wow, America has spoken! As the dust settles on what was widely considered to be a surprise outcome after a long and drawn out US election campaign, the questions being asked now are “What does that mean for global markets?” Only time will tell how Trump’s election may impact the Australian housing market in the future but there certainly hasn’t been any kneejerk reactions from buyers or vendors here in Sydney. Buyers are still very active with auction clearance rates remaining high, and vendors are still confident in the market’s direction, with several signing up with me ready to go early next year.

Turning to the most recent economic information put out by the analysts, there is evidence of renewed hype around house prices in Sydney and Melbourne which have kicked up again in recent month, mostly attributed to the further cash rate cut in August. Elsewhere, figures show that the labour market is still weak with persistent underemployment and low wage growth. Others are grappling with the long term ramifications of Trump’s win, with some theorising that it could be the trigger for the interest rate cycle to turn, with his policies likely to drive higher inflation and interest rates. This could impact the Australian housing market if it causes rates to rise here as well.


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 1.50 per cent.

Inflation remains quite low. The September quarter inflation data were broadly as expected, with underlying inflation continuing to run at around 1½ per cent. Subdued growth in labour costs and very low cost pressures elsewhere in the world mean that inflation is expected to remain low for some time.

Source: Reserve Bank of Australia


Auction results
Weekend auction results for Saturday 19 November 2016:
– Sydney: 79%
– Melbourne: 79%
– Brisbane: 46%
– Adelaide: 65%
– Canberra: 75%
 
Source: Domain.com.au                                                                                               

Labour market cash rate
‘A relatively upbeat speech by [Reserve Bank] Governor Lowe indicated that the Bank is happily on hold for now but labour market softness highlights that’s it still too early to rule out another interest rate cut next year. Employment rose in October driven by a gain in full time jobs but left in place a very weak trend for full time jobs consistent with continuing very high underemployment.’

Source: AMP Capital


House prices
‘Momentum in the housing market appears to have regained pace in recent months, reflected in a sharp rise in 6-month annualised growth in home prices – especially in Sydney and Melbourne. While there are potentially numerous drivers of this renewed strength, it is likely that the RBA’s recent interest rate cut (in early August) has been a source of support.’

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 25 November 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.
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Kiki Bermudez
Kiki brings a remarkable and varied array of qualifications and experience to her role as Sales Executive at Mint360property. A keen and effective agent, dedicated to the unique Mint360property values, Kiki offers her clients unparalleled and professional service, honest advice and commitment through their journey while achieving the best results in Sydney’s exciting market.

28th November 2016

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Kiki Bermudez

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