April 2019

This is the 12th in a series of articles summarising monthly news and happenings in Sydney real estate, and more broadly.

Pre dawn light or a trick of the eye?

The month of April is an interesting one when it comes to statistics and the state of the property market. There is the ‘before Easter’ period, and the ‘after Easter’ period. In addition, in that May 18 is the Federal election, pundits are forecasting a sharp drop in auction numbers in the lead up and on the day of the election. Clearly, the day of the election will have reduced convenience for many buyers, not to mention the uncertainty around post-election policy.

The weekend before Easter is traditionally one of the busiest in the auction annual calendar, and despite the ongoing housing downturn doom and gloom, The Real Estate Conversation reported the percentage of successful sales in 2019 was comparable to 2018, taking into account an overall lower volume of auctions this year. TRC cites CoreLogic data of 927 auctions returned a 62.9% clearance rate in Sydney. At the same time last year there were 742 auctions, and 61.5% went under the hammer.

In the same article, Leanne Pilkington, President of REINSW said (prior to Easter), “With Easter next weekend, agents are expecting much lower numbers, but continue to be happy with the consistency in results, despite lower transaction numbers.” This consistency appears to have been maintained in the weekend after the Easter break as well, with Ms Pilkington again quoted in The Real Estate Conversation as saying “… the auction numbers in Sydney were 329 with a preliminary clearance of 57.1%, meaning results continue to be stable.”

Attribution: CoreLogic

Although there is some hope that the worst of the downturn may be ending, property values are still slightly dropping, albeit at a slowing rate. The monthly CoreLogic Housing Update shows that the rate of decline has now been consistently slowing for the largest markets of Sydney and Melbourne over the last four months, even if the National decline has become more widespread. Before Easter, the National April rate of decline was at -0.6%, which puts the rate of decline as consistently slowing for 4 months.

Similarly, Sydney’s trend of decline in values has eased slightly at -0.9% compared to March, and is at -3.2% over the quarter. It’s important to note that housing values are still better than they were 5 years ago, although according to the ABC, Sydney’s median house price is set to drop below $1 million for the first time in 4 years with a current house median price of $1,027,962. The story states that in 2015 the median price was $929,659, and the price peaked in June 2017 at $1,199,679.

This real dollar value of loss adds to a sobering CoreLogic article that states, “Based the median dwelling value at the time of the market peak, a -7.4% fall in national dwelling values translates approximately into a $40,590 decline in dwelling values.” Sydney however is of course listed with a much steeper amount of loss, having dropped on average -13.9%, or $124,739.

Having said that, it’s not all bad news, in fact realestate.com.au lists a number of Sydney suburbs that have actually bucked the National trend throughout the decline, and where vendors are wondering “what downturn?” In order of largest positive gains are Mosman, Collaroy, Pymble, Chatswood and Balgowlah.

This information possibly explains the reason McGrath have just bought out LJ Hooker on the Lower North Shore, of which Chatswood and Mosman are integral, and Pymble and Balgowlah are (arguably) on the periphery.

Property market observation as sport

New research from HSBC claims that the average Australian spends about 2.5 hours a week looking or focussing on property and prices in some fashion. This might include scrolling through available housing, checking the value of their own homes, discussing prices and values with friends, or reading about the property market in articles and err blogs. To put this in context, they claim, we spend half of this amount of time on exercise, and about a third of it talking to our parents.

The good news we are 7th on the list of countries spending time focussed on property. People in the United Arab Emirates are far away the leaders in this dubious obsession, spending an average 6.6 hours a week, with the USA, Taiwan, Mexico, Singapore and the UK also all ahead of us.