Continuing with our upward trending market; we again saw a 1.4% increase in Sydney property prices over the month, and a 2.8% rise over the quarter. This puts us 13.7% higher when compared to this time in 2014.
Since the start of this current growth cycle in June 2012, Sydney’s prices have now risen by a staggering 34.8%!
The latest announcement from the RBA deciding to hold the cash rate at 2.25%, has put the average discounted variable mortgage rate at 5.7% - the lowest rate since 1968. And if you shop around you can pick up a rate as low as 4.29% pa.
Investor activity in the Sydney market is still huge at 59%, and auction clearance rates for the capital of NSW has now been above 80% for 6 consecutive weeks.
And on the peninsula – the clearance rate in the Northern Beaches for last weekend was a record breaking 94.3%!
Another factor keeping Sydney’s market alive is the very low number of residential property for sale; just shy of 12,000 properties are currently for sale in Sydney, which is close to 10% lower than this time in 2014.
Price to income ratios across the country are nearing previous all-time highs, set in 2003 and 2010. The only issue is that the peaks reached in those years were due to the RBA lifting interest rates, not cutting them like they are now.
Typical mortgage repayments are approaching 5 times the annual household income, and even higher on the Northern Beaches. This is a far cry from the average of 30% of annual income Australia experienced during the 1900’s.
Our household debt is now one of the highest in the developed world. And, the people most hurt by the current market are first homebuyers.
Previous attempts to make the market more affordable for these buyers were through the first homeowner’s grants in the year 2000 and then again in 2008. But one look at this graph shows that this initiative made the market even more unaffordable.
Our children are now facing the likelihood of long term renting rather than home ownership due to housing affordability.
With prices rising so significantly, Sydney is really starting to risk the possibility of a housing bubble.
And with another possible interest rate cut looming, the efforts of the Reserve Bank to try and stimulate the Australian economy may come at the expense of the Sydney housing market overheating.
My advice to home sellers is to take advantage of this very rare state in the market, which we may not see again for many many years. Contact me today so we can discuss your selling strategy in further detail.
Thanks for reading,
Tony.
Since the start of this current growth cycle in June 2012, Sydney’s prices have now risen by a staggering 34.8%!
The latest announcement from the RBA deciding to hold the cash rate at 2.25%, has put the average discounted variable mortgage rate at 5.7% - the lowest rate since 1968. And if you shop around you can pick up a rate as low as 4.29% pa.
Investor activity in the Sydney market is still huge at 59%, and auction clearance rates for the capital of NSW has now been above 80% for 6 consecutive weeks.
And on the peninsula – the clearance rate in the Northern Beaches for last weekend was a record breaking 94.3%!
Another factor keeping Sydney’s market alive is the very low number of residential property for sale; just shy of 12,000 properties are currently for sale in Sydney, which is close to 10% lower than this time in 2014.
Price to income ratios across the country are nearing previous all-time highs, set in 2003 and 2010. The only issue is that the peaks reached in those years were due to the RBA lifting interest rates, not cutting them like they are now.
Typical mortgage repayments are approaching 5 times the annual household income, and even higher on the Northern Beaches. This is a far cry from the average of 30% of annual income Australia experienced during the 1900’s.
Our household debt is now one of the highest in the developed world. And, the people most hurt by the current market are first homebuyers.
Previous attempts to make the market more affordable for these buyers were through the first homeowner’s grants in the year 2000 and then again in 2008. But one look at this graph shows that this initiative made the market even more unaffordable.
Our children are now facing the likelihood of long term renting rather than home ownership due to housing affordability.
With prices rising so significantly, Sydney is really starting to risk the possibility of a housing bubble.
And with another possible interest rate cut looming, the efforts of the Reserve Bank to try and stimulate the Australian economy may come at the expense of the Sydney housing market overheating.
My advice to home sellers is to take advantage of this very rare state in the market, which we may not see again for many many years. Contact me today so we can discuss your selling strategy in further detail.
Thanks for reading,
Tony.
