We left 2017 on somewhat of an uncertain note after month on month price decreases and falling auction clearance rates, exacerbated by repeated negative media headlines.
It’s too early to tell if 2018 is going to continue in the same vain. However, the first weekend in February marked the beginning of the year in terms of auction weekends, and this year we saw only 178 properties go to auction in Sydney. This is much lower than the 231 recorded in the first weekend of February in 2017.
And, the reported auction clearance rate in Sydney for the first weekend in February was around 60%. This is a stark difference to the 85% recorded in February 2017. The bad news was amplified by reports that in the three months ending in January, Sydney values fell by 3.1%. It also marked the fifth straight month of price falls in Sydney.
However, whilst this does not look like good news, it must be remembered that the Northern Beaches perennially outperforms the published Sydney-wide statistics.
The lack of available land and corresponding short supply of properties for sale, combined with the high desirability to live here will underpin prices from crashing.
However some vendors were caught short and remained unsold late last year by not adjusting their price expectation in order to meet the market.
We are seeing a resurgence of first home buyers back in the market as they experience less competition from investors.
And it’s also refreshing to note that the number of buyers attending open for inspections has increased from the start of the year compared to the end of last year.
As for 2018, my prediction is that we can expect a leveling out of prices from the price drop experienced last year. So don’t expect to see the double-digit returns year on year experienced since June 2012.
Interest rates will remain the key catalyst for any major market movements, as Sydney households will be very sensitive to a rate increase or decrease. It was no surprise that the RBA left interest rates on hold this week however many economists have predicted that the next move will be up. The question is when?
If 2018 is the year for you to make a move, let’s talk.
Thanks for reading,