April 3, 2014 by Craig Pontey
Here we are already saying farewell to the first quarter of 2014, with the end of daylight saving and then Easter marking the start of the Autumn/ Winter season.
Throughout the second half of last year, we saw almost relentless news about record clearance rates and strong price growth. Now the question being asked is will this trend continue right through 2014?
I am sure we can all agree that actual results are the best way to test the strength of any market and I am very pleased to report that during March at Ray White Double Bay we have just sold over $119,354,000 worth of real estate for the month. I also think it is significant that this outstanding figure was achieved across a wide range of sales and prices, its not just a small handful of sales.
What this indicates to me is that the strength of market activity is now more widely spread, than might have been the case 6 or 12 months ago. This is a positive because if activity is widespread across the entire market it does help to indicate a generally health market with more people on the move, selling and trading up.
Trading Up Catches On
However among all of the positive news I have also noted one particular trend. And that is we are seeing many more of our local buyers are out in strength, by locals I mean those buyers for whom the east has well and truly been home for many years. Yes there’s lots of ‘newbies’ as my kids might call them, but with strong local values we have seen a lot of people upgrading their situation. That is instead of renovating or adding to their existing home, they are selling and buying again in the east, which is starting to reverse a trend that we have seen over the past few years.
With the encouraging sales results evident and continuing into March, I do believe that there is currently a window of opportunity now for sellers to take advantage of a strong and unwavering market.
Low Interest Rates How Long Will They Last?
I also understand that while traditionally local markets tend to cool in late autumn and winter, with mid-year holidays a distraction, this year may well be the ideal time to break away from that mould.
Because I think that those potential sellers who do wait until spring may well see much higher levels of supply coming onto the market in the second half of the year. Creating a market where we have a lot more properties to compete with when selling. It is also realistic to expect that interest rates are going to come more into focus at this time, and when we look at fixed term 5-year rates currently available, these average above 5.5%, which might be a more reliable indicator than the RBA settings.
However after Tuesday’s decision by the RBA not to increase rates we have now had rates stable for 7 months. The previous longest run was 10 months from November 2011, and the last increase of 25 base points was in November 2010. So it is a long time since rates went up.
Results Reflect Hard Work
I would also like to take a few words here to mention that the Ray White Double Bay team was again the Number 1 Office across the entire Ray White Group. I congratulate our 20 strong sales team, they continue creating new sales and volume records every month. And despite a very active market these results are only made possible because no matter what the market is doing we do not forget the basics of our profession.
This includes the importance I place on marketing as I outlined in my comments ‘You Can’t Sell a Secret’ alongside the fact that a high level of personal face to face contact still underpins success.
Auctions More Than Skin Deep
It’s now almost routine to see on the weekend news an auctioneer, standing in a crowd outside a house in Sydney or Melbourne bring down the gavel with the word…sold. Auctions are clearly driving the market and are seen now as the best way to market. I think an open auction reassures sellers and buyers that both are dealing in an open free market.
However I think it is all too easy to overlook the very important role of the auctioneer, and even more so in a strong market. Properties do not sell themselves, despite the impression the TV news sometimes gives, as they show only the last few sections of what will have been a long campaign.
This brings me to a real point of difference about our office and I think it’s a key factor of our combined success. While this Blog is not about self-promotion, we are the only business in the Double Bay that has its own Auctioneer James Keenan. I am very proud of the work that James does, and how much he becomes deeply engaged with our clients, more often than not weeks ahead of auction day…this is a major point of difference as James actually takes a very personal interest in the properties he sells, and that’s a major commitment.
I would also like to take this opportunity to wish you and your family a happy and safe Easter. No matter if you’re relaxing at home or taking a holiday break, Easter fills us with hope, joy and warmth. It is a time to get together with friends, family and loved ones and celebrate this joyful time. Reach out to all your loved ones and maybe plan an Easter egg hunt for the kids. Whatever you do, along with the team at Ray White Double Bay I would like to wish you a happy Easter.
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