| Residential Market Commentary |
|
The following is a summary of a number of different market updates and market commentary of where the residential property market is heading in Sydney and across New South Wales. Currently market indicators reflect a slowing in the residential real estate market and softening of prices as identified by RP Data's "Market Activity Index". This has shown a gradual decline since late May 2010 and does continue to fall. Other market indicators including the housing finance approvals also continue to fall as well as the consumer confidence and with the probability of ongoing interest rate rises that are suggested to continue into the second half of the year, along with a fall in dwelling approval rates, construction of new dwellings and the auction clearance rates which were recently recorded at 56.5%, a fall from the 70% high's from earlier in the year Given the above information, it appears we are on a gradual slide going into the second half of the winter period which can be expected to continue for sometime into spring. Other pressures to the market place will be the forth coming State and Federal elections. This would create some scepticism into the future stability and would ensure a downward trend until the elections have passed which we suggest wont be until mid to late spring. Therefore this downward trend should continue until mid to late spring when market activity historically tends to historically begin to rebound. Coming into winter there is no surprise that new listing numbers were falling across the board, though we did note that the total number of available listings remain steady, if not rising slightly and this was reflected a weakening in demand and the up take of available properties in the market place, this is because of the slowing of buyer activity. Of further note is that the New South Wales State Government continue to provide stamp duty concessions, there is the lack of business confidence and as previously noted the future potential rising interest rates and a shaky world economy does provide an environment of uncertainty. On a national level the recent changing of the Prime Ministership and the consideration of an early election which is considered imminent and does creates uncertainty and historically these events do show a slowing down within the residential market place therefore slower buyer activity. Therefore given the above market indicators, we do expect a lack luster remainder for the winter period and that sentiment to flow on to early or mid spring. We expect housing prices to remain static if not a modest fall. It is in our opinion that with the arrival of the warmer months and with the Federal election behind us we should see the real estate market kick back into action and along with a more stable world economy and the confidence coming back into the purchasing of primary materials not just from China but other European nations our mining and rural sectors should show continued growth and confidence across the National economy and therefore we do expect a more moderate growth pattern to take place in the residential real estate market towards the end of the 2010 and going in 2011. NOTE: the above information has been obtained from the following sources:
|