Frustrated buyers are waiting for the market to slow down and after this week’s interest rate rise (the 6th since September 2009) we are asking the question – what will be the tipping point?
We are seeing a few indications that the property market may be starting to cool.
• Firstly, an article in last Saturday’s Sydney Morning Herald said that there are a record number of auction listings this month. More listings means that buyers have more choice and more choice usually means less competition, which in turn means lower prices.
• I went to another Westpac briefing yesterday and they are seeing the first stages of a drop in consumer sentiment. If buyers are not confident in their own financial security they will begin to act with more caution.
• Anecdotal evidence from agents selling property in outer areas of Sydney is that things have cooled in the lower price bracket. Since the first home buyer segment lead the current real estate charge it only stands to reason that it should also lead a slow-down.
Having said all this, we are heading into a winter market, where low stock levels traditionally result in heightened buyer demand and continued price growth. So the tipping point may be delayed until spring is upon us.
For more information on buying property in Sydney go to www.gooddeeds.com.au.
I believe the Sydney market should run out of steam in the coming months. There are a number of key factors currently working against it -
ReplyDelete1. six interest rate rises
2. slowing retail sales activity
3. drop in loan approvals
4. end of the first home buyers grant boost.
5. drop in skilled migration numbers