Auction clearance rates also dropped to 55% - A far cry from the regular 80%+ weekends we were experiencing at the peak of the boom last year.
A culmination of factors ended one of the most meteoric rises in property values for quite some time.
A surge in new housing construction created more supply. Government regulation clamped down on foreign investment together and APRA forced banks to tighten lending conditions on investors. The banks followed this up by independently lifting their own interest rates causing a shift in buyer sentiment. After huge year on year gains, buyers eventually retreated towards the end of last year as property values and housing affordability reached boiling point.
We have seen positive signals in the early stages of the New Year that the market may have found a new level. In the often quiet period between New Year up to the Australia Day long weekend, we have experienced 3 times as many people at our opens compared December 2015.
The increase in buyer activity has caused a 0.5% increase in property prices over the month of January.
So what’s in store for us in 2016?
As we move into the next stage of the property cycle I believe there is still some growth left in our market this year, albeit modest, so forget the double-digit returns we’ve experienced over the past 3 years. The RBA’s decision earlier in the week to keep rates on hold will not distort the market any further.
And For the Northern Beaches it’s a tale of two cities. As a primarily owner-occupied area, do not expect the Northern Beaches to suffer the same fate as the wider Sydney market. Being a highly desirable area to live in with limited stock, buyers will continue to pay a premium for our enviable lifestyle. I keep telling everyone – god is not building anymore beaches!
For a more accurate prediction of your own property please do not hesitate to contact me anytime.
Thanks for reading,