July 2019

This is the 15th in a series of articles summarising monthly news and happenings in Sydney real estate, and more broadly.

And so the sun again rises

This month in the Sydney housing market, Core Logic reports on the state of the market are again relatively buoyant, and are somewhat confirmed by stories such as that on Real Estate.com.au that says the Inner West and Northern Beaches are leading Sydney’s recovery – an example of which can be found here.

So confident is the market of the return to positive figures, that in fact that first paragraph was largely written before the CoreLogic results were even released. As Michael Janda, writing for the ABC notes, commentators far and wide are predicting an imminent if gradual recovery.

The Core Logic Market Update for the month did eventually confirm that the national overall month-on-month change to values is the ‘least weak’ since March 2018, in fact, with a 0.0% growth in either direction. In Sydney, the month-on-month values are at 0.2%; 0.1% higher than last month, which was then the first positive territory since the July  2017 market peak. As an aside, it’s not often you get to say that the month-on-month values actually doubled this month.

Interestingly, from a political perspective Lawless notes that the gradual slowing of the downturn (that started in January ‘19) may have had less to do with the Federal election than first thought, describing the slowing downturn prior to the election as ‘organic’.

Data also shows some very positive clearance rates for the week ending 28th July. The Real Estate Conversation cites CoreLogic to claim that not only was the clearance percentage up, but also the number of homes taken to auction was higher week-on-week (even if it was lower year-on-year).

Attribution:  CoreLogic

Building on Construction

Moving towards shoring up the limping construction industry, according to the Real Estate Conversation, State building ministers met in Sydney to discuss improved regulation. Much of the discussion centred around the adoption of findings in the Shergold-Weir report.

The report makes for an interesting read. Prominent throughout is discussion of the flammable aluminium composite cladding which has been such as disaster in the UK and here. As the report says, “this issue has been a dominant underlying theme of the consultations we have held.”

The report in part cites the work of Dame Judith Hackitt, who released an independent report on building regulation and fire safety in the UK in the wake of the Grenfell disaster. From Dame Judith’s report, Shergold-Weir quote, “that the whole [UK] system of regulation, covering what is written down and the way in which it is enacted in practice, is not fit for purpose, leaving room for those who want to take shortcuts to do so”.

In relation to this finding, Shergold-Weir say:

“Some of the problems addressed by Dame Judith are strikingly similar to those in the Australian building and construction industry. She identified ineffective enforcement, low levels of competency across the sector, lack of clear accountability and inadequate documentation throughout the building approvals process worsened by poor change control and quality assurance. She concluded that these manifold deficiencies have contributed to a mindset which is willing to do things as cheaply as possible and pass on responsibility for problems and shortcomings to others.

Sydney auctioneers are back in action!

Other progressive things

Domain has an interesting story about movement away from providing parking for all. Undoubtedly controversial to some, this solution for the congestion issues facing Sydney’s inner city may simply be inevitable. Already many people in central areas have little real impetus to own a car – everything is already there. Cycle ways and share car services are on the rise. Could these become as popular here as they are in international cities? What could be the effect on house prices if the default inner city residence came without a parking space? Many questions to answer, but the benefits of cleaner air, safer and more aesthetic living areas are a definite drawcard.

View of Sydney from the north