We are now approaching almost a month since the federal election in May, and as an agent in the Eastern Suburbs I believe there has been a positive shift in current market trends as a result of the liberal party’s re-election.
As you would be aware, Labor’s proposed changes to negative gearing, and CGT created high levels of uncertainty within the real estate market, forcing a negative shift on property pricing, time on market, auction clearance rates and overall buyer activity. Since liberal’s re-election the Sydney’s auction clearance rate in May reported at an encouraging 55.5%, seeing its highest clearance rate since March 2018 (Wilshire, 2019.)
So what does this mean for the remaining selling months of 2019?
- Increase in genuine buyer activity
The one major thing I have found following the election is that there are definitely a lot more genuine buyers in the market. Prior to the election you will have found that agents will tell you that numbers through open homes were definitely not been an issue, however the level of genuine interest in way of realistic offers and active parties at auction had been lower than expected, particularly on properties suitable to investors. At Ellison Zulian Property we have experienced a shift in buyer feedback and as a result have exchanged on a number of properties following the election result.
- Days on Market
With an increase in genuine buyer activity, in conjunction APRA*’s proposed changes to loosen lending requirements, I anticipate a decrease in both unit and home sales time on market from the current average of 76 days for houses, and 65 days for apartments in the Eastern Suburbs South (Powell, 2019).
- Stock Levels
As current property stock continues to transact at a more consistent level, I believe we will, in turn, see a consistent market across property pricing. As a result of this, I anticipate to see an increase in stock levels with a shift in buyer activity, and market pricing which allows for greater confidence as a vendor entering the market.
- Auction Clearance Rates
As a result of the positive shift in the market trends discussed above, I expect to see a continuation of positive auction clearance rates like that of May 2019. Ultimately, I believe that now we can eliminate hurdles that were associated with the market to begin 2019, and from now on if a property is realistically priced, you will see a sale prior to or at auction.
I hope you have found something useful to take from the above; I look forward to seeing you through one of my open homes soon.
* Australian Prudential Regulation Authority
Powell, N. (2019). Domain Market Wrap. [email].
Wilshire, T. (2019). Sydney auction report card: May 2019. [online] Domain. Available at: https://www.domain.com.au/research/sydney-auction-report-card-may-2019-843223/ [Accessed 3 Jun. 2019].