The year that was 2016
Looking back on the year that was 2016 we are very pleased to report that the full year rate of growth was the fastest pace since 2009. In fact, the cumulative change in dwelling values from January 2009 to now (post GFC growth) has been 97.5% for Sydney followed closely by Melbourne at 83.5%. With many local property price records being set, it should come as no surprise that the 2016 annual change for dwelling value in Sydney increased by 15.5%, with the December quarter contributing 2.4% to that figure.
One of the advantages of property in the Canada Bay precincts is that we have a very diversified market place and this sees our agency moving a variety of individuals and families on a day to day basis. The satisfaction that comes from achieving the highest price paid for a home in Russell Lea ($5,610,000) to the purchase of a studio apartment on Lyons Road for $337,000 is very gratifying as different as those purchases may be, the people we worked with were equally excited to be moving into or within the area.
What did we see in 2016? What did we learn in 2016? What did we experience? What were the major take-aways from 2016?
- Serious stock shortages put pressure on demand for local housing pushing prices up, sometimes well beyond agent and vendor expectations
- An affordable mortgage climate saw more sellers holding off selling to upsize or downsize as bridging finance became less of a concern in the short term
- Auction was the preferred method of sale
- Length of time on market was kept to a minimum, in many cases property sales were negotiated prior to the usual 28-35 day auction campaign
- With prices at a premium so are the needs and wants from purchasers who are happy to pay a premium so long as they feel they are getting value in return
- Vendor discounting was minimal and where properties were not sold within 2-3 weeks of auction dates an anomaly in either vendor pricing expectations or building/design issues appears to have been the underlying factor
- The latest Housing Affordability Report (HAR) highlighted that approximately 44.5% of household income is now being used to service a mortgage
- With prices soaring across the board, first home buyers were struggling to enter the market and looking to sources such as parents, grandparents for financial assistance
- Australian Bureau Statistics data shows investors have been progressively increasing their share of mortgage demand and total 49% mortgage demand (excluding refinances)
- Investors continue to look to property as a preferred financial growth option despite the fact that rents are growing at a substantially slower rate than that which dwellings values are increasing
What do we anticipate for the year ahead?
- While stock levels remain subdued competition for housing will continue to grow and underpin prices
- Auction will remain the preferred method of sale so as not to cap prices in a heated market
- Negotiating with purchasers is critical but the key element to success here is the rapport, reputation and experience the agent has throughout any scenario which may arise. Even in a good market there is a difference between the cheapest agent and the best agent – that is the difference between a good result and an outstanding result
- With less reliance on print media there will be more of a focus on property presentation so that when prospective purchasers look online or in person first impressions are lasting