Greetings from Scoutable and welcome to our first newsletter of the year. We hope you had a great holiday season and wish you the very best for 2020.
The property market (unofficially) kicked off after Australia Day, with the first round of auctions scheduled for 8th February. We have been out inspecting properties over the last few weeks and have noticed a significant increase in the number of buyers out looking, in some cases up to 100 groups of buyers per property. How this increased demand transacts on the auction floor will be revealed in the clearance rates over the coming months. Our forecast is that the auction clearance rates will potentially be well over 80%.
According to CoreLogic Hedonic Home Value Index, the last quarter of 2019 saw dwelling pricing rebound, with Sydney up 6.2%, Melbourne up 6.1% and Brisbane up 2.4%, resulting in an overall national increase of 4% in dwelling prices. Tim Lawless said, “The positive year-end results mask what has been a year of two distinct halves -we saw capital city dwelling values fall by 3.8% over the first six months of 2019 and then rebound by 7.0% over the second half of the year. The housing value rebound was spurred on by lower mortgage rates, a relaxation in borrower serviceability assessments, improved housing affordability and renewed certainty around property taxation policies post the federal election. Lower advertised stock levels persisted providing additional upwards pressure on prices amidst rising buyer activity.”
Looking ahead to 2020, Mr Lawless commented that we are unlikely to see the same pace of increase in property prices as seen in the second half of 2019. Factors affecting growth for 2020 include housing affordability, increased supply in established stock, over supply in new construction and possible regulations changes from APRA.
SQM Research's, Housing Boom and Bust Report 2020, reported their outlook for house prices over the coming year, running four different scenarios. Scenario One (base case) is based on interest rates remaining steady, the economy improving and Australian Prudential Regulation Authority (APRA) not making any regulatory changes. Scenario One suggests Sydney could see price gains between 10 -14%, Melbourne, 11 – 15% and Brisbane between 3 - 6%. Scenario Two shows the property price growth could be further fuelled if interest rates are cut again. Mr Louis Christopher, Managing Director of SQM Research, said “Sydney and Melbourne would see the rapid property price increases of recent months continue into 2020, and would pass their previous house price records of 2017 sometime before the end of September". Scenario Three, involves APRA intervening by mid-2020, reducing property price gains. Scenario Four show the potential effects on prices if the economy weakens and the Reserve Bank cuts the cash rate to zero.
Please see table below.
As always, our advice is that property is a long-term hold. There will always be movement in the market. The key is to not over extend yourself, buy in ‘blue chip’ locations (close to transport, retail facilities, CBD, schools, universities, hospitals) and do your research.
If you would like to discuss the current conditions of the market further, or are thinking of buying or investing in Australian property, get in touch to learn about Scoutable's services and how we can assist with your property search.
Until next month,
Kellie Landrey | Principal Buyers Agent
IN THE NEWS
DOMAIN PROPERTY OUTLOOK 2020
https://www.domain.com.au/news/property-outlook-2020-australias-property-market-set-to-keep-rising-but-will-peter-out-mid-year-experts-say-918712/
ARE REAL ESTATE AGENTS UNDERQUOTING?
https://www.abc.net.au/news/2019-12-30/are-real-estate-agents-underquoting-hot-property-market/11829060
NEWTOWN COTTAGE SELLS FOR ALMOST 42% MORE PER SQUARE METRE THAN POINT PIPER MANSION
https://www.realestate.com.au/news/tiny-inner-west-cottage-sells-for-massive-price-as-auction-market-turns-red-hot/
PROPERTY OF THE MONTH
42 ALBERTO STREET, LILYFIELD
Lilyfield is a suburb in the Inner West of Sydney, six kilometres west of the Sydney CBD. Lilyfield’s neighbouring suburbs including Balmain and Rozelle providing a multitude of retail and restaurant amenities. The property of the month is situated at 42 Alberto Street, an award winning warehouse conversion by architect Virginia Kerridge. The warehouse was originally built in 1920 used by Oh Boy Candy Company. The warehouse has been recreated into a luxury four bedroom residential home. The layout comprises three bedrooms, rumpus room and two bathrooms on the ground floor, along with large garage for up to three cars and storage. The first floor accommodates the living space - open plan kitchen / living / dining, home office (or fifth bedroom), bathroom and terrace with plunge pool. The second floor provides the master bedroom with ensuite and balcony. The property is set for auction on 15th February. The price guide is $5,500,000 and if sold for this price or more, will set a record for the suburb.
If you'd like to know more about this property or any others, please get in touch.
