How’s the market? Spring market holding up

Despite pessimism in some quarters of the media, the property market held up well in September, particularly given the volume of stock. It seems agents were unnerved by declining clearance rates and falling numbers of bidders per property.

Whilst clearance rates and bidders per property were down, properties continued to sell. Even those that passed in at auction sold shortly afterwards. A market where most failed auction campaigns sell, within a week or two of the auction, can still be considered strong.

In a truly soft market, failed auction campaigns languish. This is clearly not happening in the current market. The unprecedented boom that peaked in the first half of 2015 may have passed but selling conditions are still very good. Maybe not the best of times when compared with earlier in the year, but still very good.

If vendors are accepting that the market is running very close to full value, it makes the decision to sell easier. Anyone who claims to know when the real estate market has peaked is either lucky or lying. Prices for 2015 are still well up on where they were in January.

Two highlight sales in September were 58 Glassop St Balmain that sold after 19 days on market and 4/7 Day St Drummoyne that sold for $1,250,000 after 5 days on market. Both sales demonstrated that buyers are still prepared to act decisively and pay a good price for real estate that meets their requirements. Furthermore, 47 Horden St Newtown (pictured) sold for $2.2 million in a bullish sign for the Newtown market.

The market is likely to experience elevated stock levels until late November. This will even out the ratio of buyers to sellers. Expect clearance rates to remain high, but maybe without the same vigour amongst the competing buyers as there was earlier in the year.

HOW’S THE MARKET Spring market holding up Investor interest has declined since APRA toughened lending to residential investors. The other contributing factor to declining investor interest may be the sluggish rental market. Whilst property values have skyrocketed, rents are stagnant if not falling. For some time we have felt that this was the great unreported aspect of the property boom that swept Sydney.

It’s worth noting that expat enquiry and buying is increasing, which offers an area of support for the market.

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