August Director’s Desk – Back and Forward.
Friday 19 Aug 2016
I have to admit it has been another frustrating month. Fantastic, but frustrating. Sydney delivered an auction clearance rate of 82% on the weekend, reflecting ongoing and consistently strong demand. Traditionally such great results would generate real market confidence but it still doesn’t seem to be enough to entice new vendors to list. It’s all a bit backward when it should be going forward.
I did hope that as the weather warmed so would vendors’ attitudes to the opportunities that exist in the current market. Spring is officially only a couple of weeks away I am genuinely surprised to find property numbers are not rising with any significance.
So what have we got?
We have record low interest rates and buyers recognising that the low rate environment is here for the foreseeable future. It is therefore not surprising that buyers are active and keen to find a property while finance is accessible not just right now but also looking forward to the long term. Demand exists.
What frustratingly doesn’t exist is the supply to absorb that demand.
I recognise there is talk of potential apartment oversupply in coming years. I acknowledge we have seen a slight rise in vacancy rates with landlords no longer able to expect automatic rent increases, but when you think about it those realities should dampen demand in the future rather than impact supply right now.
Vendors are holding back based on an expectation the market is about to weaken. But the results we are achieving for our clients demonstrates that while vendors are holding back the market is actually moving forward.
Savvy clients are seeing the opportunity. Listing now will capitalise on the current strength in demand and capitalise on what I anticipate will be a further spike in demand in the early weeks of Spring.