Recent Market Activity

Typically the winter months see a general reduction in market activity. However, in recent months, the buoyant Sydney market has surprised many and has seen widespread price gains. Given the impending traditional Spring selling season, we felt it worthwhile to offer a brief round-up of the Sydney market.

2013 has seen a dramatic turnaround in market sentiment. Investors and home owners alike have reaffirmed their affinity with property and have engaged with residential property with renewed vigour. Stock levels have decreased and, in conjunction with low interest rates, there is an ever increasing pool of buyers looking to enter the market.

So far this year the auction clearance rate is an impressive 74.3%, compared with 55.8% for the same period last year. The graph below demonstrates just how the monthly average clearance rate has increased and is now consistently higher than was experienced during the strong market performance of 2010.

House and apartment prices rose nationwide for the months of June and July, with Sydney recording the most positive gains. According to RPData, Sydney dwelling prices rose 1.9% and 1.6% for June and July respectively. National dwelling prices have now increased 6.5% since the bottom of the market in May 2012.

This is excellent news for our owners, regardless of their intentions to sell or hold. Indications are that the slow market activity of 2011 and 2012 has turned around and pundits are expecting meaningful growth to be consistent over the medium-term. This positive market climate also affords property owners the possibility for growth in their property portfolio and the resultant opportunity to manufacture additional equity and resultant rental yields through minor renovation work.

If you would like to know more about how your property is performing relative to the Sydney market, or any works that can be performed to increase your asset’s performance, do not hesitate to contact us.

Sydney Rental Market

Irrespective of whether it is Bondi or Blacktown, Mosman or Minto, the current rental market in Sydney is extremely competitive. In most cases, rental properties – when priced in line with local market conditions – are experiencing an overwhelming volume of tenant enquiry despite the traditionally slower winter period. This is excellent news for our owners as it not only makes achieving strong rental income possible, but also supports attracting a broader pool of prospective tenants from which to select a stronger and more reliable tenancy candidate ie One who is more likely to pay rent on time and look after the property.

Vacancy rates continue to be very low. According to research house SQM, the Sydney metro region currently has a vacancy rate of a mere 1.8%. This fact is also causing upward pressure on yields, with gross rental yields for apartments across Sydney now averaging over 5%pa. This, along with the low interest rates on offer, is drawing investors back to the market and helps support the sustained  price growth and sales activity outlined above.

 

Follow: Subscribe to this post's comments