Chicken or the Egg?
Wednesday 12 Jun 2019
The eternal quandary around what comes first, the chicken or the egg, has its own application in the current property market. What does come first in the property cycle? Prices, properties or people?
Whilst there appears to be rising expectations about the potential of the Sydney property market to ignite at the moment it feels like no single group is quite ready to make the first move. It seems that everyone is waiting and wondering what comes first?
The last few weeks have been eventful in terms of macro events that have the potential to directly impact the housing market. The widely unexpected Coalition win in the Federal election has been seen as positive for market sentiment. Equally the entirely predicted cut in interest rates is expected to support increased activity.
But there hasn’t yet been a magic burst of buying which is making people nervous that it might not come.
I know it will. Remember we have seen reasonable activity throughout this year already, but we have become so accustomed to the extraordinary that we don’t recognise there is still value in ordinary.
We also expect instant reactions when property doesn’t really work that way. It can take a little longer.
Take listings. Cooley Auctions last week released numbers that showed listings in May were down 50% on the same time last year, the result of the uncertainty potential vendors have felt around the value they could secure.
That isn’t going to change overnight but with the Federal election now over and the movement in interest rates our team are already finding more property owners now prepared to consider listing their property. There is growing confidence, and continuing evidence, that good value can be achieved.
Listings will increase over coming months and with that increase in property available I expect to see an increase in prospective buyers.
There is really no magic behind which comes first. Prices, people and properties are all vital ingredients for a strong, healthy property market. They are all out there right now and I believe conditions will generate growing activity.