House prices in Sydney are now 3.9% higher than at the start of the year, and 8.9% higher than May 2015.
Our auction clearance rates on the Northern beaches are over 80% compared to 70% for the whole of Sydney.
Homes are taking slightly longer to sell, with the Sydney average being 36 days on market compared to 26 days at the same time last year.
The Federal Budget was released last week, and though there wasn’t many changes made that will directly affect the housing market, the statement from Treasurer Scott Morrison that negative gearing will not be touched will at least settle some uncertainty from many Australian investors for now.
Do not expect this to go away though, as it is shaping up to be a hot topic for debate in the upcoming election.
Perhaps the biggest news of the month was the surprise drop in interest rates by a further 25 basis points to 1.75%, following reports of deflation in our economy.
This was attributed to falling petrol, food and clothing prices, plus property prices abating and is the first time in seven years that we have seen a falling dollar value.
This is the first time the RBA has made a cut in a year. This further sugar fix should put more kindling into the fire of Sydney’s hot property market.
Some economists are suggesting the deflation will continue and we could see another cut in August.
My only concern is that this is artificially propping up home values, and we may see a heavy landing in the future once interest rates eventually go back up. Just remember the saying – what goes up must come down.
My advice is that if selling is on your radar do not wait until Spring time when most sellers put their property onto the market thinking it is the best time of year because the flowers are in bloom.
Take full advantage of the current interest rate drop and the low supply on the market during the colder months.
I must point out that the two previous years saw the market start to run out of puff after meteoric rises at the start and middle of the year.
If you have any questions about how to maximise the value of your property, please feel free to contact me at anytime.
Thanks for reading,