August’s RBA meeting saw the cash rate dropped to 2.5%. This is now 50 basis points below the 3.0% experienced at the start of the GFC in 2009. It is anticipated that most lenders will pass the cut on in full. The impact for the Sydney market in the short-term is for increased sales prices as confident buyers compete for a dwindling supply of housing stock. While the growth in loan activity has been relatively subdued up to this point we expect this to pick up substantially and translate into strong buyer activity coming in to the busy spring/summer selling season.

Across Sydney, and in all price points, the real estate market is very active. We are noticing a large number of buyers, fuelled by low rates and positive market sentiment, keen to purchase properties. This is keeping auction clearance rates above 80% and dramatically reducing the average number of days on market for private treaty sales.

The stock level of properties for sale is significantly down. According to SQM Research, Sydney is demonstrating a 2.1% month-on-month decline with the number of listings falling a dramatic 17.0% since July 2012 (and up to 25% in inner-city areas). This reduction in available properties is undoubtedly putting an upward pressure on price and more and more buyers are missing out on properties. We are strongly recommending that prospective buyers be decisive and have all their due diligence conducted in a timely manner to put them in a strong position to purchase in a heated buying environment.

 

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