In this month’s market summary, many of the high level sources discuss that although the market is in a downwards direction, this decline is not substantial. It’s more of a correction than a fall. The question is, after the GFC, the huge ramifications of that over the last few years and other finance shockers (ie banking Royal Commission) are we becoming attuned to expecting disaster?
For example, although the ABC reports that $36 billion has been wiped from Australian house values so far in 2018, it might help to see this in a wider context. While this is a huge amount by any standards, looking at the figure against the total size of the market – $6.9 trillion – it’s a change of less than 0.5%.
Looking more closely at the Sydney market, Malcolm Gunning, president of the Real Estate Insitutue of Australia is quoted in the Real Estate Conversation as stating “What is also quite clear is in Sydney there are multiple markets… The decline in price or auction numbers varies from region to region… Each area in Sydney, and the dynamics, are a little different.”
This diversity in the Sydney market is also confirmed by the experience of individual auctioneers. While Real Estate Conversation data from one company shows that in 2017, clearance rates of 68% compared to an average of 52% at the moment, other auctioneers such as Chris Scerri observe that:
“The average clearance rate for the year of 2014 was sitting between 65% – 70% which is actually a little lower than what we are experiencing in today’s market conditions. Currently, Scerri Auctions are sitting above average at 75%.”