Over May, We Observed Buyer and Seller Power at an Economic Equilibrium.

A new suburb record of $7.7M

What does equilibrium look like for our market? Over May we observed buyer and seller power meet somewhere firmly in the middle as signs of a more balanced market appeared. With opportunity readily available on both sides, it seems there is a buyer for every seller in an evenly matched marketplace, bringing negotiations back into the equation, no matter the method of sale.

Although our agency’s clearance rate sits firmly above 90%, this shift has been observed in our local area and broader Sydney where declines are being recorded, and more properties pass in on auction day. Buyers are proving to be more conservative in their bidding force than they were six months ago, less willing to quickly overextend themselves to rise above the intense competition we’ve seen dominating auction floors previously.

This is not a foreboding, so don’t be mistaken - auctions are still performing well, but many homes are selling well prior to auction, or shortly after being passed in - and understandably, there remains ample competition for the most spectacular homes, with the price point of Concord and surrounding suburbs remaining unwavering. 

This month, we made history with the record sale of 22 Tripod Street, a grandiose and modern family haven achieving $7.7m - that’s $1.3m more than the already notable benchmark set by another home in the same street, less than one month ago.

It seems much of the competition has mutated heavily into the rental market, where levels of demand have remained increasingly high, while supply remains low. Such a climate has enabled rental properties to consistently perform exceptionally well with minimal vacancy rates, multiple applications from quality tenants, and excellent rental yield, although conditions prove challenging for potential tenants needing to secure a home. 

The weather may be cooling, but it doesn’t mean the market has to follow and we have a number of prime opportunities coming to market in the next month, if you’ve been looking to make Canada Bay your home. Off-market exclusives are our speciality, and some of our most notable sales have been simply by linking opportunities with purchasers through knowing what they want. 

We’re now supporting vendors to prepare for blossoming Spring campaigns, so let’s have a discussion about how we can strategise now and launch your sales campaign before the rush arrives.

What the Federal Election means for housing
 

Housing was most certainly a defining issue for both parties in this month’s Federal Election. With the success of the Australian Labor Party, we’re likely to see a number of policies that aim to address housing affordability.

One of these is the proposed ‘Help to Buy’ scheme which provides a more affordable entry point to the housing market, with 10,000 places annually for individuals on low-to-mid level incomes.

The program enables purchases to buy a home with a minimum 2% deposit, with an equity contribution of up to 40% of its purchase price, from the Federal Government.

Auction activity
 

The final week of May recorded the most productive auction week since the pre-Easter spike in activity, with Sydney’s clearance rate at 66.9% as at 27 May, and 141 properties passed in. 

With more than double the 532 auctions held the week prior, the figure still remains down -4.7% from the amount held this time last year.

Interest rates

The CBA predicts that inflation is close to peaking in Australia and that the

Reserve Bank interest rate will top out at 1.35% this year and 1.6% next year.

If prior cycles set an indication for what we can expect, the Australian economy will be very responsive to changes in the cash rate, with inflation able to be slowed by interest rate increases which will reduce demand and further stabilise the domestic economy.