October 2019

This is the 18th in a series of articles summarising monthly news and happenings in Sydney real estate, and more broadly.

Market improvement

Core Logic closed October by announcing the third consecutive month of gains. These gains have have lifted the national market value by a cumulative 1.7% since the market nadir in May.

This month, many different voices from the Sydney Morning Herald, through to news.com.au seem to be adding to an increasingly positive view of the property market. The Real Estate Conversation is particularly guilty: James Nihill, unapologetically hyperbole, writes in absolutes that Sydney “continues to outperform other capital cities”, and that “the good news is there is still time for all buyers to jump into the Sydney market while it is still relatively affordable”. Not sure if his brief was to ignite FOMO in readers but these kind of blanket statements do little to dispel it.

This is especially in contrast to broader and much darker economic forecasting by The Conversation’s forecasting panel spelling out very few positives looking ahead over the next 12 months. Of course, they’re academics – they are always going to be gloomy. Funnily, both articles use similar idiomatic language in the title. The Conversation’s forecasting panel says we should ‘Buckle Up’ for the bad times ahead, whilst Nahill recommends to ‘Hold Your Hats’ in anticipation of a market blast off. Can they both be right?

Attribution:  CoreLogic

On the Up and Up

Despite the warnings from the Conversation, many different indices are on the rise. These include ABS data, auction clearance rates, an increase in new home approvals, and even further that the Federal Gov’t first homeowners scheme has overcome its next hurdle (though more recently the ABC notes economists argue the scheme is a drop in the ocean, and won’t necessarily improve affordability).

A particularly pertinent one of these positive voices is this interesting comparison in The Real Estate Conversation that compares the weekend clearance rates of 12-13 October, with 729 homes taken to auction in Sydney with preliminary results showing a clearance rate of 82.3 per cent. Compare this to the week previous, where 317 auctions achieved a final clearance rate of 74.7 per cent was recorded across just 317 auctions; and compare again to this week from a year ago, where 647 Sydney auctions achieved a final clearance rate of 45.1 per cent.”

Core Logic Auction results 13 Oct shows that the rapid upward movement of the last 2 months may have paused with a little kick at the very right end of the graph.

In a similar economically upbeat vein (unless you’re concerned about Australian’s debt levels), TREC discusses the latest ABS data which shows an increase in the number and the value of home loans over August, and that these figures are in line with the more positive outlook of the market over the last month or so.

Attribution: https://gresb.com