Greetings from Scoutable and welcome to our May Wrap Up.
May saw 3,018 properties scheduled for auction across Sydney, with an average clearance rate of 62.5%. Melbourne saw 4,387 properties scheduled, also with an average clearance rate of 62.5%. Brisbane saw 590 properties scheduled for auction with an average clearance rate of 43.5%. In comparison, May last year saw an average clearance rate of 74.3% (4,379 properties), 76.8% (4,922 properties), & 47.3% (1,195 properties) respectively.
The above data is showing a drop in clearance rates of 11.8% in Sydney, 14.3% in Melbourne and 3.8% in Brisbane for the May year on year comparison. Across the three cities, there has been an overall drop in the number of properties scheduled for auction.
While there is an obvious slowdown in the overall market, housing affordability is still a talking point.
According to Peter Koulizos – Chairman of Property Investment Professionals of Australia(PIPA), many commentators are using just two indicators to measure housing affordability – income and house prices. "This is a good measure to indicate how expensive housing is, but if you want to analyse affordability, you must also consider mortgage repayments."
In the table below, PIPA looks at the annual averages on loan size, interest rates, loan repayments and wages. Their research suggests that mortgages are more affordable today than they were in 1990.
SOURCES: ABS, tradingeconomics.com, loansense.com.au, NAB
In 1990, it would require 48.1% of the average annual wage to pay off the average home loan of $66,300 due to the high variable interest rate of 17%.
While the average home loan size has grown substantially to $389,000 in 2018, the standard variable rate is just 5.1% (or less) resulting in repayments of 40.9% of the average annual wage.
While house prices are still rising in some blue chip areas it seems to be the initial deposit that is disabling buyers rather than the ability to service a loan and we’re seeing people using innovative strategies such as rentvesting or buying within syndicates.
If you're thinking of buying or investing in Australian property, get in touch to learn about Scoutable services and how we can assist with your property search.
Till next month,
Kellie Landrey | Principal Buyers Agent
IN THE NEWS
A BUYERS MARKET IS UPON US
https://www.news.com.au/finance/real-estate/sydney-nsw/sydney-property-market-transitions-to-a-buyers-market/news-story/55c28c0db6561a75ab3039c59d7380ab
FOREIGN INVESTMENT BOOM LOOKS TO BE OVER
http://theconversation.com/australias-foreign-real-estate-investment-boom-looks-to-be-over-here-are-five-things-we-learned-97460
$30MILLION INFRASTRUCTURE BOOST FOR SYDNEY'S EAST
http://www.sydneymedia.com.au/30-million-infrastructure-boost-for-east-sydney/#hp_f_listMedia_1_%2430+million+infrastructure+boost+for+east+Sydney
PROPERTY OF THE MONTH
1/301 ST GEORGES ROAD FITZROY NORTH
Once the Fitzroy Fire Station circa 1912, now 301 St Georges Road. Due to it’s mixed zoning, this Fitzroy North landmark had been cleverly converted into apartments and offices all whilst maintaining it's glorious façade.
“Warehouse 1” is a three-level light filled home offering versatility and style, providing three well separated bedrooms plus two extra spaces ideal for the home office.
Original fire truck doors lead into the garage which provides ladder access to the mezzanine office space.
Unfortunately, while there is a ladder to climb up, there is no pole to slide down. Ground floor also has another entrance providing access to the second office, third bedroom and the rest of the home.
The first floor comprises the second bedroom, bathroom, balcony and an expansive open plan living space with exposed beam work providing clear zones for kitchen, living and dining.
The top floor offers a master retreat with huge entertaining terrace and panoramic views to the city.
With a guide of $1,850,000 - $2,000,000 we look forward to seeing what this one sells for.
If you'd like to know more about this property or any others, please get in touch.
