Half Yearly Report 2022 - The Inner West is Still the Best.

Landing at the halfway mark
We’ve landed at the halfway mark of 2022, and there’s certainly been some change since March.

A Federal Election and change of Government has brought with it a range of new housing policies to support access and affordability- particularly for first home buyers, while inflation and interest rates have dominated our news screens.

Two consecutive interest rate rises over May and June bring the current cash rate to 0.85%, playing an important role in alleviating the rising levels of inflation impacting everyone. 

Increased interest rates have also done their bit to slow the once uncontrollable rising median growth the market enjoyed a long ride of, but…

The Inner West is still the best
Amidst moving tides, the Inner West remains unshakeable. Clearance rates ending June recorded the first rise in five weeks across Sydney, with the Inner West’s 67.2% clearance rate proving that we’re still the highest performing pocket in the city, along with the East.

Supporting this, we made history in June with the record sale of 22 Tripod Street, a contemporary palace selling for $7.7m - a major $1.3m more than the benchmark set by another home in the same street, less than a month before.

As the general market stabilises and the pendulum is swung back into buyers’ hands, we’ve noted some trends worth sharing with you:

Urgency has left the building - Buyers are now able to take a bit more time with their purchasing decisions, as attendee numbers have steadied and only the most serious buyers are active in the marketplace

Buyers are qualified and prepared  – Demand may not be as high, but for those we’re working closely with on finding a home, they’re able to make their move now, and are simply waiting for the right moment.

Entry level properties aren’t lasting long - Dwellings like townhouses and villas are proving very popular as entry level properties that offer an accessible price point, and achievable first home goal.

Where the changes are heading
The slowdown in price growth is expected to continue as purchasing conditions also improve for buyers. Prices are, however, unlikely to dip below pre-pandemic levels. 

Given Sydney house prices took the quickest and sharpest 40% equity boost on record from June 2020 to March 2022, the market is more than robust enough to deal with the slowing momentum we are witnessing.

New Help to Buy scheme for first home buyers
According to economists, Australia’s record-low interest rates were the driving force behind the major rise in first home purchases during the pandemic with about 300,0000 first home buyers joining the market since March 2020. 

The new Federal Government is keen to continue supporting first home owners, introducing the new Help to buy scheme.

The scheme offers a Commonwealth equity contribution of up to 40% of the purchase price of a new home, and up to 30% for an existing home. 

To qualify for eligibility, a minimum 2% is required, and a taxable income of up to $90,000 for individuals and up to $120,000 for couples.

Those accessing the Help to Buy scheme will have excellent access to apartments - with 79% of suburbs eligible for the scheme based on an assessment of current median house prices by CoreLogic.

Changes to stamp duty for first home buyers
First home buyers will also now have the option of choosing between an upfront stamp duty tax, or a smaller, annual property tax under new reforms introduced.

The change means that first time purchases will be provided with choice on which tax is most suitable for them, with their decision not affecting any future owner of the property. 

The choice may help to lower the upfront costs of purchasing, enabling more people to break into the market.

Interest rates
The Reserve Bank of Australia has lifted the official cash rate to 0.85% over June, the second consecutive increase since May, by half a percentage point. 

There are forecasts the cash rate could hit 2.5% by the end of next year, and it is likely we will see further increases in the second half of 2022, as the cash rate is used as an important mechanism in managing inflation by minimising consumer spending.

A rental market at peak
The rental market is still in the limelight this quarter with popular and well priced properties seeing very low days on the market. Our May figures are the lowest recorded this year, taking an average of  7.9 days to lease a property.

Inspection numbers remain incredibly high, and since pandemic restrictions have eased and borders have re-opened, we’ve seen numbers essentially double at open homes.

The combination of these factors has bolstered an incredibly strong and competitive rental market in comparison to this time last year, with demand for homes continuing very favourable outcomes for landlords, and most properties leased after the first open home inspection.
 

Click here to download a full version of the Half Yearly Report.

Spring campaigns in bloom 
We’re now connecting with owners who want to leverage the Spring season to sell their home. 

Let’s talk about the best plan for your property, and how we can have a tailored campaign ready to execute as soon as September arrives.

The DibChidiac team