2013 A Turning Point In The Market
On reflection – what an interesting year it has been in the real estate market. The past 12 months has seen some significant increases with the marketplace moving from strength to strength.
With 4 weeks left of 2013, I already have clients who have confirmed their instructions to sell ‘first cab off the rank’ in 2014. These homeowners are looking to take advantage of this traditionally strong period early in the year to make the move. There is always an influx of international buyers who arrive and stay over Christmas and New Year and actively seek property throughout the summer selling period.
This seasonal buoyancy, matched with the demand from our active local buyers (clients, ‘under bidders’ and owners who have sold their homes and are desperate to get into the market in the coming 12 weeks), creates the perfect supply/demand scenario to ensure that 2014 begins with a bang.
Before we embark on 2014, reflecting on the market over the last 12 months provides an indication of what we can expect over the coming months. Monitoring the eastern suburbs closely, we have noticed that there is consistent and strong demand in several areas. This is particularly evident within pockets around the eastern suburbs.
The strongest demand has been within the $750,000 – $2,500,000 price bracket; with auction clearance rates averaging over 85% within the Ray White Double Bay office. We have seen multiple bidders in the auction room and owners expectations are being exceeded in most cases. We expect this positive momentum to continue into 2014. This demand is mostly fueled by the low interest rates and people making the economic decision – that it is almost the same price to rent as it is to buy. While rents are high and interest rates remain traditionally lower than usual, this trend will continue into the New Year.
It has also been noted the strength within the marketplace for new or near-new properties and properties enjoying Harbour views, especially in the last quarter of 2013. There have been several factors pushing the momentum of this market: the influx of Chinese buyers to the market – this year I have personally achieved five new street records with three out of five sales to Chinese buyers. Australian residential real estate is considered safe for Chinese to invest in and they are less worried about pricing and more concerned about purchasing the right home. This combined with a large amount of disposable wealth; their one primary goal is to buy a residential property in Sydney.
Naturally, this is not the only factor; it is however adding fuel to the fire. The low interest rates, a return to a liberal government coupled with more consumer confidence is helping give people with larger disposable incomes, more confidence to take out bigger mortgages. One must also highlight the return of people buying before they sell; a trend only evident when consumer confidence is high.
When reviewing 2012, it was apparent that people were nervous to buy a home before they sold. Overwhelmingly, they were concerned that they could be caught in an uncomfortable situation holding two properties and being forced to secure (expensive) bridging finance, if they were not be able to sell their home at auction or within the traditional six week settlement period.
Due to both economic confidence and an increased demand for real estate, there is now less fear surrounding this situation occurring. Rather there have been strong consistent sales transactions across the board. I have listed below some interesting statistics from my office:
In 2013 Ray White Double Bay has:
With 2014 on the horizon, matched with a stronger property market, now is the time – upgrade your home, downsize to take advantage or look to expand your investment portfolio. If you would like an up to date market opinion or you feel you have been sitting on the fence to make the move – “to sell or not to sell”, I welcome the opportunity to have a confidential conversation to provide some clarity and discuss the options and opportunities available to you and your family.
Wishing you and your family a safe and happy holiday, I look forward to hearing from you in the New Year.